Balance Sheet & Profit and Loss of Proprietorship Business

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Sanjay N. Gadkari (Querist)
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01 October 2020 Dear All,

kindly give advice that Interest received on Saving A/c, FD, RD of Proprietor can be shown in Propriety business P& L a/c or capital a/c. Also advice that personal saving or investment is compulsory to show in Business Balance sheet or not.

CA Kushwanth AVSR

CA Kushwanth AVSR (Expert)
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02 October 2020 While preparing books of accounts, it is advisable to show those interests in capital account as the same is taxable under the head income from other sources. However, if you had shown the same in the profit and loss account then while filing income tax return, the same can be shown as deduction to profit as income shown under other heads.
It is advisable to show personal assets in your balance sheet as in case of proprietor, there is no difference between proprietor and business but still in case of personal assets like House, Personal land there is no need to show those. It is advisable to show the assets through which you earn income.