Sir,
my name is B & Im a partner of xyz firm, the firm has alloted salary to partners @ Rs.3.50 lacs
in the firm entry for this done as Salary to Parnter (Dr) 3.50 lacs & and credited to capital account of partner (B) .
As Im separately filing my Income tAx return, I passed entry for this salary as -
Income from Salary Rs. 3.50 lacs Cr and Capital iwtwithh xyz firm Dr. 3.50 is it okay ?
No salary recd from the partnership firm will not be treated as capital withdrawn due to business entity concept. Partnership Firm is an entity different from its partners.
When receiving salary in individual hands, debit cash, not the capital.
The capital will remain intact in the business.
Seems you didn't get the point. in Partnership Firm Salary added to partners capital
in my personal account I have to show this as Capital with xyz Firm .. .
Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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