hi,
i and my father operate a small export firm ( sole proprietorship ), the turnover of the firm this year has been good at around 2CR, and out of that i have made a profit of 25 lacs ( before tax), now my query is as follows.
1. can i purchase a commercial shop from the profit amount in my fathers name.
2. the shop is worth 5 lacs, so can i make the purchase from my profit and after that pay tax on the remaining amount.
like 25(profit from business before TAX) - 5( cost of the shop) = 20 (remaining profit amount)
can this be done or do i need to pay tax on the entire 25 lacs then from the remaining amount make the purchase.
we dont have any fixed salary for ourselves from the business when ever we need money we take it out of the accounts. but never so huge amount, just 5000 or 10000 at times of need.
please guide as soon as possible as the shop is up for sale and i have to pay some advance by next week only else it will sold to someone else. intend to use the shop as my office.
thanks & regards
Rajarshi
CAclubindia
