Bank cc loan required Rs:8 lacs

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Kollipara Sundaraiah (Querist)
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02 April 2021 Sir,
How to prepare a balance sheet and profit and loss account cc loan Rs:8 lacs a bank and what amount show in itr .

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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06 July 2024 ### Preparation of Balance Sheet and Profit and Loss Account

#### 1. **Understanding the Structure**

**Balance Sheet**:
- **Assets**: Includes current and non-current assets.
- **Liabilities**: Includes current and non-current liabilities.
- **Equity**: Includes share capital, retained earnings, etc.

**Profit and Loss Account**:
- **Income**: Revenue from sales or services.
- **Expenses**: Costs incurred in earning the revenue.

#### 2. **Incorporating CC Loan in Balance Sheet**

**CC Loan of Rs. 8 lacs**:
- **Under Liabilities**:
- Short-term borrowing: Rs. 8 lacs (Bank CC Loan).

#### 3. **Example of Balance Sheet**

**ABC Pvt. Ltd. Balance Sheet as on [Date]**

**Assets**:
1. **Current Assets**:
- Cash and Bank Balances: Rs. 2 lacs
- Accounts Receivable: Rs. 5 lacs
- Inventory: Rs. 3 lacs
2. **Non-Current Assets**:
- Plant & Machinery: Rs. 10 lacs
- Land & Building: Rs. 20 lacs

**Total Assets**: Rs. 40 lacs

**Liabilities**:
1. **Current Liabilities**:
- Accounts Payable: Rs. 4 lacs
- CC Loan: Rs. 8 lacs
2. **Non-Current Liabilities**:
- Long-term Loan: Rs. 5 lacs

**Total Liabilities**: Rs. 17 lacs

**Equity**:
- Share Capital: Rs. 15 lacs
- Retained Earnings: Rs. 8 lacs

**Total Equity and Liabilities**: Rs. 40 lacs

#### 4. **Example of Profit and Loss Account**

**ABC Pvt. Ltd. Profit and Loss Account for the Year Ending [Date]**

**Income**:
- Sales Revenue: Rs. 50 lacs
- Other Income: Rs. 2 lacs

**Total Income**: Rs. 52 lacs

**Expenses**:
- Cost of Goods Sold: Rs. 30 lacs
- Administrative Expenses: Rs. 5 lacs
- Financial Charges (including interest on CC Loan): Rs. 1 lac
- Depreciation: Rs. 2 lacs

**Total Expenses**: Rs. 38 lacs

**Net Profit Before Tax**: Rs. 14 lacs
- Tax Expense: Rs. 3 lacs

**Net Profit After Tax**: Rs. 11 lacs

### 5. **Reporting in ITR**

When filing the Income Tax Return (ITR):

1. **Revenue**: Report the total income (Rs. 52 lacs) under the income section.
2. **Expenses**: Report the total expenses (Rs. 38 lacs) under the expenses section.
3. **Net Profit**: The net profit (Rs. 11 lacs) will be the income after all deductions and should be reported as taxable income.
4. **Balance Sheet**: Report the values of assets and liabilities as per the balance sheet prepared.

### 6. **Key Points to Remember**
- Ensure accuracy in reporting the amounts.
- Interest on the CC Loan is to be reported under financial charges.
- Adhere to the format specified by the Income Tax Department for filing the ITR.
- Consult a professional if you are unsure about any entry to ensure compliance with tax laws and accounting standards.

### 7. **Resources**
- Refer to the official Income Tax Department website for the latest ITR forms and guidelines.
- Use accounting software or consult a chartered accountant for precise accounting and tax reporting.