Assessment of individual
This query is : Resolved
24 March 2014
An individual is into govt. service. He has income from salary and one house property. Can a Income/Expenditure account and balance sheet be prepared for him?
24 March 2014
No one can stop you from doing that. But use of the same shall be for your record purpose. It has no use while filing your Icome Tax Returns.
Message likes :
1 times
24 March 2014
Thank You for your answer.
Can the capital accumulated by preparing I/E & B/S of a salaried person can be used when he retires?
What expenses is to be shown from such I/E account? OR the entire salary (basic+DA) can be added to capital?
Can the capital accumulated by preparing I/E & B/S of a salaried person can be used when he retires?
What expenses is to be shown from such I/E account? OR the entire salary (basic+DA) can be added to capital?
14 July 2024
In the context of a salaried person accumulating capital through savings and investments, here's how it generally works:
### Accumulation of Capital:
1. **Income and Expenditure (I/E) Account:**
- Typically, an Income and Expenditure Account is prepared to track the income earned and expenses incurred by the individual over a period. For a salaried person, this would include their salary (basic salary and any dearness allowance (DA)) as income.
2. **Balance Sheet (B/S):**
- The Balance Sheet shows the financial position of the individual at a specific point in time. It includes assets (such as savings, investments) and liabilities (such as loans, if any).
3. **Use of Accumulated Capital at Retirement:**
- The capital accumulated (savings and investments) over the years, as reflected in the Balance Sheet, can be utilized upon retirement. This could include funds saved in bank accounts, investments in stocks, bonds, mutual funds, or any other assets.
### Expenses and Treatment:
- **Expenses in Income and Expenditure Account:**
- The Income and Expenditure Account typically includes expenses such as household expenses, taxes paid, insurance premiums, etc. These are deducted from the income (salary) to arrive at savings or surplus.
- **Treatment of Salary:**
- The entire salary earned (basic salary + DA) during the working years contributes to the individual's income. From this income, expenses are deducted to determine savings.
- **Accumulated Savings (Capital):**
- The savings accumulated over the years, as shown in the Balance Sheet, represent the capital that can be used at retirement. This capital can include savings in bank accounts, investments in securities, real estate holdings, etc.
### Conclusion:
The capital accumulated by a salaried person through savings and investments, as reflected in the Balance Sheet prepared over the years, can indeed be used at retirement. The Income and Expenditure Account helps in tracking how income (salary) is utilized and what savings are achieved after deducting expenses. The entire salary earned contributes to the capital accumulation, as it forms the basis for savings and investments.
It's important for individuals to manage their finances prudently, ensuring that they save and invest adequately during their working years to build a sufficient corpus for retirement. Seeking guidance from a financial advisor or accountant can be beneficial in planning for retirement and understanding how to utilize accumulated capital effectively.
### Accumulation of Capital:
1. **Income and Expenditure (I/E) Account:**
- Typically, an Income and Expenditure Account is prepared to track the income earned and expenses incurred by the individual over a period. For a salaried person, this would include their salary (basic salary and any dearness allowance (DA)) as income.
2. **Balance Sheet (B/S):**
- The Balance Sheet shows the financial position of the individual at a specific point in time. It includes assets (such as savings, investments) and liabilities (such as loans, if any).
3. **Use of Accumulated Capital at Retirement:**
- The capital accumulated (savings and investments) over the years, as reflected in the Balance Sheet, can be utilized upon retirement. This could include funds saved in bank accounts, investments in stocks, bonds, mutual funds, or any other assets.
### Expenses and Treatment:
- **Expenses in Income and Expenditure Account:**
- The Income and Expenditure Account typically includes expenses such as household expenses, taxes paid, insurance premiums, etc. These are deducted from the income (salary) to arrive at savings or surplus.
- **Treatment of Salary:**
- The entire salary earned (basic salary + DA) during the working years contributes to the individual's income. From this income, expenses are deducted to determine savings.
- **Accumulated Savings (Capital):**
- The savings accumulated over the years, as shown in the Balance Sheet, represent the capital that can be used at retirement. This capital can include savings in bank accounts, investments in securities, real estate holdings, etc.
### Conclusion:
The capital accumulated by a salaried person through savings and investments, as reflected in the Balance Sheet prepared over the years, can indeed be used at retirement. The Income and Expenditure Account helps in tracking how income (salary) is utilized and what savings are achieved after deducting expenses. The entire salary earned contributes to the capital accumulation, as it forms the basis for savings and investments.
It's important for individuals to manage their finances prudently, ensuring that they save and invest adequately during their working years to build a sufficient corpus for retirement. Seeking guidance from a financial advisor or accountant can be beneficial in planning for retirement and understanding how to utilize accumulated capital effectively.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- ITC temporary reversal and reclaim
- Inventory of finished goods
- Applicable TDS rate for sale of property in Nov 2024
- RCM INVOICING FROM NOV-2024
- GST Regis.
- Can we claim ITC of Feb-2024 in the month of November-2024 which was not claimed by oversight
- Sale of property furniture sale
- REGARDING 25 AS DATE OF PAYMENT AND DATE OF BOOKING
- Quiery in relation to GST liability in case of an advocate who has obtained GST registration.
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
- Regarding einvoice taken on nil rated sales
- Strategical investment in Public listed company
Trending Online Classes
CAclubindia
