Preparation of fin. stat. for filing itr

ITR 305 views 4 replies

Dhrunil Bhatt

Chartered Accountant

232 Points Joined July 2014

Dear Experts,

One of the assessee is earning income by way of commission as an insurance agent. As per Form 26AS TDS is deducted under section 194D and 194H. Apart from this the assessee also earns income by way of rent from renting of residential house property and Post office MIS interest and other miscellaneous interest income.

Now for the purpose of filing return of income, the assessee needs to file ITR 3 (AY 2017-18). For that purpose, the assessee needs to fill general information (Balance Sheet and Profit and Loss Account) in the ITR.

This agency business is not a new business. It is being operated since last 5 to 6 years. Now my question is how to prepare the balance sheet and profit and loss account of the assessee individual in the middle of the business.

What all assets and liabilities are to be included?

How do I value those assets?

How would my profit and loss account look like?

In short I would like to know how whole process of preparation of Financial Statement would move?

Thanks and Regards,

Dhrunil Bhatt

Replies (4)

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

209032 Points Joined July 2016

" What all assets and liabilities are to be included? "

You can prepare BS of firm, where in personal assets are not included. May be just little furniture, stationary, Cash in Hand and Bank balance (both non-zero figures), any sundry creditors or any amount due from debtors!

"How do I value those assets?" Any tentative figures in the beginning, (to be followed for next years) as per market value.

" How would my profit and loss account look like?" As usual Income side the commissions/brokerage received and expenditure side all the expenses incurred to arrive at the income!!

Dhrunil Bhatt

Chartered Accountant

232 Points Joined July 2014

Sir do first need to include salary and fixed deposit saving bank interest on the credit side and then deduct it at the time of filing ITR and show it in appropriate head I.e salary and income from other sources.

If yes then should I show FD and balance of saving bank account on the asset side of the balance sheet

Thanks and Regards,
Dhrunil Bhatt

Dhrunil Bhatt

Chartered Accountant

232 Points Joined July 2014

And also rent from house property on the credit side of profit and loss account and then deduct the same to include it in appropriate head.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

209032 Points Joined July 2016

"Sir do first need to include salary and fixed deposit saving bank interest on the credit side and then deduct it at the time of filing ITR and show it in appropriate head I.e salary and income from other sources?"

Not compulsory. When the P&L acc & BS are preprared only of the business/profession, the other incomes or capital accounts are not included in it.

If the matters other than proprietary business are not being accounted for in the books of the proprietary business or profession, these need not to be included in the balance sheet and profit and loss account to be filled in this Part.