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Business income in savings account

25 November 2016

Sir A person has business income from trading in clothes and has a turnover of under 10 lakhs I want to know if he is required to open a current account and also register the firm or he can continue to deposit income from business into savings account every month

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (182530 Points)
Replied 26 November 2016

Earnings are deposited into savings account, but no business transactions carried over it. OK, but all your business transactions are on cash basis, and on smaller scale, so difficult to prove whenever asked for. Even some states have VAT liability arising from 5 lakhs turnover, so check that.

If you want to expand your business from current level, its advisable to make it in proper form.