I have started my own business. i had received cash gift of Rs. 11,100 from parents on Diwali and shown it as capital introduction. I am receiving payment by way of cheque only. Now I wants to introduce additional capital. How can I? My exact point is, if I pass an entry "Cash A/c. Dr. to Capital A/c.", then the question may arise as to from where this cash came? If i wants to introduce capital through Bank, how can i? i mean, what could be the Journal Entry?
17 December 2016
You can introduce fresh capital either in cash or bank mode but there will be onus on you to prove from where you get/earned/received such cash. if you are regular Income tax payer for last some years than you can easily introduce fresh capital by proving the same were earned/save from your last years income. but if you showing it as gift from blood relation there will no any income tax on you under provision of section 56 but the blood relation who gave you gift must be able to subsatntiate the same when asking by Income tax department. for journal entries in your accounts if you introduce fresh capital by bank mode is given herein below: Bank A/c Dr Capital A/c Cr ( Being Capital Introduced....)
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