Home loan

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

13 October 2011
how to show home loan in balance sheet. house is self occupied.

Last year
Value of the House is Rs. 8 Lakhs
Home loan against it Rs. 4.5 Lakhs

This year
Value of the House is still (No depreciation bcoz self occupied) Rs. 8 Lakhs
Home loan against it Rs. 3.5 Lakhs

Now my question is that how can tally the balance sheet.

CA SUMiT PATWARi

CA SUMiT PATWARi (Expert)
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13 October 2011 on the source of funds side of balance sheet(balancing item) you will have:-
owned funds : 3.5 lacs in last year
owned funds : 4.5 lacs in current year

Querist : Anonymous

Querist : Anonymous (Querist)

13 October 2011 Liabilities

Capital 3.5 Lakhs
Loan 4.5 Lakhs

Assets
house 8 Lakhs

This year

Capital 3.5 Lakhs
Add Profit 1.5 Lakhs
Less Drawing 1.2 Lakhs
Balance capital a/c 3.8 Lakhs

Home Loan 3.5 lakhs

Total 7.3 lakhs

assets
House 8 lakhs

how can i tally it?

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CA SUMiT PATWARi

CA SUMiT PATWARi (Expert)
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13 October 2011 You will have to reduce your drawings to 0.5 lacs

Or, Else increase your profits to Rs 2.2 lacs.

If you are maintaining books of accounts check your accounting entries.

Querist : Anonymous

Querist : Anonymous (Querist)

13 October 2011 can i deduct interest paid on home loan from capital?

CA SUMiT PATWARi

CA SUMiT PATWARi (Expert)
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13 October 2011 Prepare a statement of profit an loss for the year.
In that you can show profit from business/any otehr income on income side and interest on home loan on expense side and any other business expense.

The balance is to be added to opening owned funds in balance sheet and deduct drawings thereater.

Querist : Anonymous

Querist : Anonymous (Querist)

13 October 2011 once interest will be deduct from income and again shows in income from house property how is possible?

CA SUMiT PATWARi

CA SUMiT PATWARi (Expert)
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13 October 2011 Computation of income from house property is not a part of your books of accounts.
It is separate, where you compute your taxable income and tax thereon.

In your books of accounts you have to record all expenses and incomes. Hence in our books we are recording expense only once.

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