Gift by chq

Gift income should go in capital a/c........

Dear

Gifts can't be treated as "expense" unless it has got its own exemption. So its better to clasify under "Expenses Disallowed" so that at the time of finalisation it wil be decided by the Auditor.

gift to xyzz A/C dr

       to Bank A/c cr

bank ac dr

      to gift ac

gift is treated as indirect income from accountig point of viwe, from inocome tax point of viwe it is treated as 

income of the persion so entry would be\

bank ac dr 

    to gift ac(under the head of capital a/c)