Proprietor salary

A proprietor cannot technically take a salary from their own business as it's not a separate legal entity. Instead, any money taken out for personal use is recorded as drawings, reducing the proprietor's capital account. While transfers between personal and business accounts have no strict limits, frequent transactions may attract queries. For tax purposes, salary payments are not allowed as a business expense and will be disallowed under income tax and GAAP, with taxability based on the individual's income slab.