sec 44ad business it person family expenses and hand loans to friends rs:10 lacs payment through on digital mode (Google pay and phone pay and other modes) one financial year.bank transaction entry passed cash balance negative show in books.
question:
1.assessess rs:10 lacs amount family expenses and cash loans to friends showing or cash withdrawal transactions treatment in books
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Family expenses pay to digital mode
Replies (1)
Under Section 44AD, presumptive income covers all business expenses, but personal expenses and loans are not business-related and should be treated as "Drawings" or "Loans/Advances." A negative cash balance is legally hazardous as it may lead the Income Tax Department to treat the shortfall as unexplained income under Section 68. You should always ensure your cash book reflects reality and separate personal transactions from business accounts.
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