Two b/s or single b/s for prorietor for income tax ??

Hello everyone,

 

i prepare only one balance sheet of my clients who are prorietor. in the balance sheet i show business assets as well as personal assets like bal. in saving a/c, residential flat, jewellery etc.

 

However many CAs/Tax consultants prepare two b/s. one for the prorietorship firms and one prprietor in which personal assets like cash, saving banks, flat etc are shown. In such case i am confused as to whether only b/s of the firm will be reported in the ITR forms or both b/s of firm and proprietor ?

 

What is the proper way ?

 

Replies (5)

better way to clubbed together...

There is no need to show personal assets of the proprietor in the ITR/Balance Sheet. Only Assts & Liablilities connected to the Business or Profession of the Proprietor need to be shown.

 

- Ruben Balooni

You should prepare two Balance sheet .One for Business and one for Proprietor.

Although,For income tax purpose you should make one cosolidated Balance sheet.

I don't know which is better option but even during my training session we used to make one single balance sheet for income tax purpose

We have to prepare only one balance sheet as there is one individual or one pan card number. There is no need to prepare 2 balance sheet for one person as business assets or personal assets. Both should be clubbed together are prepare one balance sheet.

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