Investment in sole proprietorship

ITR 1429 views 2 replies

pooja

student cpt

93 Points Joined August 2012

hello..... my 1st query is "can we show the personal invesments made by a sole proprietor in shares, mutual funds etc as drawings"......... i dont think its compulsory to show it in p/l ac as it is not related directly to the business and it can be termed as personal for sole proprietorship.. my 2nd query is dat normally we show investment(capital) losses in the p/l ac, but there is no such coloumn in p/l ac of itr4 where we can show this loss,, should we show this loss as other expense ???........ its urgent, pls reply asap

Replies (2)

Dheeraj

Learner

1100 Points Joined February 2009

1st Answer : Yes you can show it as drawings and infact you should show it as drawings as it is not your core business.

2nd Answer: Capital(Investment) loss can be shown in profit and loss account only for the purpose of maintaining accounts but for incometax purpose Capital Gains and Losses are always shown seprately under head Capital Gain instead of PGBP thats why you did not find such column in Profit and Loss A/c while filing Incometax Tax Return.

pooja

student cpt

93 Points Joined August 2012

u r right.... but in respect to ur second answer, i think total business income(net profit) after taking into account all heads of income is bifurcated into cap gain/loss etc & business inc for the purpose of tax..... in itr4 p/l ac there is a coloumn for profit on sale of investments but no coloumn for loss on investments..... so either we hv to fill a negative value therein or show this loss in other expenses... not sure tough