CAPITAL ACCOUNT IN TALLY

MY CLIENT IS A PARTNER IN TWO BUSINESS CONCERNS AND HE IS A SOLE PROPRIETOR IN ANOTHER ONE CONCERN.MY QUERY IS HOW TO SHOW HIS CAPITAL ACCOUNT BALANCE IN WHICH HE IS A PARTNER IN BALANCE SHEET? WHETHER IT COMES TO CURRENT ASSETS DIRECTLY OR I HAVE TO MAKE ANY JOURNAL ENTRY FOR THIS? PLEASE GUIDE ME

 

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Quick Summary
This discussion clarifies how to display a partner's capital account balance in Tally ERP. It explains that a partner's capital in one business concern doesn't directly appear as a current asset in their sole proprietorship. Instead, you need to create a ledger for the partner, defining their role (e.g., owner or creditor), and a separate capital account ledger. Importantly, the capital account balance from a partnership firm is not shown in the sole proprietorship's balance sheet, as they are treated as distinct entities for tax purposes.

You have to create a ledger on their name defining the nature of the transaction eg. creditor/ owner etc

Create ledger of capital account
There's no requirement to show capital account balance of partnership firm in his proprietary business. Both are separate entities under Income tax act.

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