Preparation of Bal. Sheet and Statement of Affairs of Propri

A/c entries 5082 views 4 replies

Kannan M

Consultant

85 Points Joined February 2009

When preparing accounts for an Individual (a Proprietor) in Tally, we prepare P & L and Balance Sheet. My doubt is whether we have to account only Business transactions and cash withdrawn for personal expenses like investment in lic and purchase of house are also to be accounted and included in the balance sheet. Second thing is, when preparing ITR 4 for income tax purpose, whether we have to show all in the Balance sheet like personal investments in lic and purchase of house and loan taken for purchase of house. Or all personal related like purchase of house, loan taken for purchase of house, personal investments in lic, mutual fund etc. to be shown in Statement of Affairs of an individual which is not to be shown in the business balance sheet and Income tax return.

Replies (4)

Kalpesh

Accountts & Income Tax

338 Points Joined August 2008

Nice Question.

1. WE CAN MAINTAIN 2 TYPE OF P & L AND BALANCE SHEET, IF WE KEEP PERSONAL BOOKS AND FIRM BOOKS DIFFERENT THEN NO NEED TO MENTION PERSONAL ASSETS IN FIRM BOOK ELSE WE HAVE TO MENTION ALL DATA IN FIRM BOOK IF WE NOT KEEP SEPERATE BOOKS OF ACCOUNTS FOR FIRM. SO IF ONE BOOKS THERE THEN HAVE TO MENTION IN P & L AND BALANCE SHEET.

2. IN ITR4 WE HAVE TO MENTION ALL DATA AS WE SIGN IN RETURN IN NAME OF PERSONAL NOT IN FIRM NAME SO ALL DETAILS SHOULD BE THERE ONLY .

Kannan M

Consultant

85 Points Joined February 2009

Thanks Mr. Kalpesh.

Since a Proprietor is an assessee, he can show all his personal as well as business assets and debts in the balance sheet. The same can be shown in the ITR4 balance sheet also. What are all expended for personal use can be taken as drawings.