rent of house

This query is : Resolved

survesh (Querist)
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17 March 2011 Hi,

Please say a Proprietor pays his house rent rs.15000.00 from is bank ac.Can it been shown in P/L ac as a expenses or to its drawing ac.

A prop. is engaged in caters business.

Please Reply.

Thanks & Regards

Sunil Kr. Sanganeria

Sunil Kr. Sanganeria (Expert)
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17 March 2011 If house id used by proprietor and his family for personal use only. It should be drawing of the proprietor.

If proprietor is doing business from the same place, a pert of the rent paid may be shown as an expenses incurred fro running the business

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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17 March 2011 It depends, if the business is carried out from the same house then it can be treated as business exp otherwise the whole amount is to be treated as drawing.

But, if the house is used for residential cum business purpose, then only a proportionate value of rent can be treated as business exp & the rest will be drawing.

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