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What 'balance carried forward... ' means?

Abhishek (Freelancer) (57 Points)

30 July 2017

Hello,

what needs to be filled in '49. Balance brought forward from previous year' in 'Profit and Loss' schedule of ITR 3?

For example, Say my previous year total income was Rs. 2,00,000 and my personal expenses/drawings for living, were Rs. 1,80,000, so should the remaining Rs. 20,000 should be written in 'Balance brought forward from previous year' field in 'Profit and Loss' Schedule this year?

Also, In 'Part A - BS' schedule, what should be filled in '4c. Profit and Loss account/Accumulated balance' based on the above given values?

Thanks!

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10 Replies

Giridhar S Karandikar (Team Lead) (7553 Points)
Replied 30 July 2017

b/f balance means the balance standing to your profit and loss account of the previous year
what type of business are you carrying on

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Abhishek (Freelancer) (57 Points)
Replied 30 July 2017

Thanks for your response, Giridhar. I am IT freelancer. Can you please make me understand with the example figures given in above post.

Giridhar S Karandikar (Team Lead) (7553 Points)
Replied 30 July 2017

so you are a professional. you need to prepare an income and expenditure account each year for the income and expense carried out by you.
now in your example I assume that the figure given Is your income I.e. your total receipts for the year less expenses incurred for carrying on your profession other than drawings. so 200000 would constitute your balance to the income and expenditure account which you need to show in your ITR. so in 49 of your ITR you need to show 200000 and in 4c you need to put the accumulated balance I.e. balance upto f y. 2015-16 and add balance of 2016-17
hope it helps

Abhishek (Freelancer) (57 Points)
Replied 30 July 2017

Ok, but what about the expenses done on food for living, would that not be taken into consideration anywhere? I read somewhere that expendture on food should be reduced from total income while calculating the 'balance carried forward from last year'? And by balance of 2016-17 you means the income for fy 2016-17 less the expenses incurred on profession? Thanks very much for your time!

Giridhar S Karandikar (Team Lead) (7553 Points)
Replied 30 July 2017

if they are incurred in carrying your profession then only it will be considered. for household related food expenses it will treated as your drawing and deductible from your capital account. income means your receipts less your business expenses which you need to carry forward

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Abhishek (Freelancer) (57 Points)
Replied 30 July 2017

ok thank you. where I can show these drawing/food expenses in ITR form?

Giridhar S Karandikar (Team Lead) (7553 Points)
Replied 30 July 2017

capital account of your balance sheet

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Abhishek (Freelancer) (57 Points)
Replied 30 July 2017

Thanks very much Giridhar. What should be flled in '4c. Profit and Loss/Accumulated Balance' field in 'Part A - BS', should it be same as balance brought forward from previous year, i.e. 2,00,000 as per given figures?

Giridhar S Karandikar (Team Lead) (7553 Points)
Replied 30 July 2017

it shud be the accumulated balance standing to the profit and loss account upto 31.03.2016. I.e. balance carried forward from each year getting accumulated and upto 31.03.2016 to which balance as of 31.03.2017 will get added

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Abhishek (Freelancer) (57 Points)
Replied 31 July 2017

Thank you Giridhar, one more urgent thing. I am an individual resident and have received some payments through paypal, total amount below 3 lakhs in multiple parts(by rendering services), is section 92E applicable for me?

Thanks very much!