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TAXATION DOUBTS

reena jain (CA ) (247 Points)

05 September 2010

HI FRIENDS

KINDLY LET ME KNOW

1. FOR OBTAINING BANK LOAN 3 YEAR'S IT RETURNS ARE REQUIRED . ENLIGHTEN ME THAT SALARY RETURNS ARE ENOUGH OR BUSINESS RETURNS ARE NEEDED.HOW CAN A SALARID EMPLOYEE TAKE A LOAN IF HE DOES NOT HAVE BUSINESS RETURN.

2. IF PROPRIETOR OF A FIRM DIES DURING THE FY . HIS WIFE BECOME PROPRIETOR AND TURNOVER OF BOTH PART OF FY EXCEEDS AUDIT LIMIT THEN 2 AUDITS ARE REQUIRED ? OR SINGLE?

THANKS

REGARDS

REENA JAIN

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5 Replies

darpan chheda (Accounts Manager) (90 Points)
Replied 06 September 2010

Dear Reena,

Based on my understating, the answers to your queries are as under:-

1. For availment of loan, what is important is the repaying capacity of the borrower & not the class of income. Even a salaried class having established his repaying capacity, can avail loan facility based on the salaried returns.

2.I think single audit will do, unless name of the proprietorship is changed.

Request other experts to have their inputs in this

thanks

Kamal Jain (FCA) (200 Points)
Replied 06 September 2010

There will be 2 Tax audits/ITRs as assessee's will be different having different PAN Nos.

However both the ITRs will be signed by the wife of the deceased proprietor being a legal heir.

venkatraman shrinivas (Tax consultant/Tax Advocate In Practice.) (313 Points)
Replied 06 September 2010

For availing Bank loan, there is no specific requirement as to business income. What all the bank is concerned is th worthiness of the person and capacity to repay the loan. Evewn salaried person, if he/she has income that could evoke sanction of loan of the volum required by the applicant, it would do.

As regards the second issue, two separate audits are required, as the wife of the deceased person would be required to file one return upto the dat of death of the proprietor, in her capacity as the legal heir of the deceased and another in her name for th broken period, i.e. from the date she took over the reins of proprietorship (consequent to the death of her husband) till the end of he financial year/previous year, relevant for the asessment.