Payment to Vendors

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Gurvinder Singh (Querist)
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10 January 2025 Hello Sir,

Can a person make payment to vendor from his savings account, if he is proprietor. Please advise.

Thanks
Gurvinder Singh

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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10 January 2025 While it is common for proprietors to eventually open a separate business account for better financial management, organization, and tax purposes, there's no legal requirement to do so initially. Therefore, using a personal savings account for business payments is acceptable. Although it's legally permissible, for clarity, organization, and professional management, it's advisable to consider opening a separate business account. This can help in tracking business expenses, managing cash flow, and simplifying tax filing.