hey friends,
we have partnership firm we filled income tax return under presumptive income, now my doubts are
1. balance sheet preparation is required under income tax act
2.one of my partner said he want to set of his profits to his propertiary firm, is it possible under presumptive income tax return.
thanking you
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presumptive income
Replies (9)
1. Not mandatory, but practically you can prepare.
2. Not possible.
Your 2nd query is not clear as per my understanding your firm is having some trade relationship with your partner's prop. business, here he is asking for book adjustment to transfer his profit (being part of closing capital). if that is going to be the case you can do adjustment the amount will be treated as drawings from his capital and receipt from his business account.
there is no relationship with my partner business, he asking balance sheet for profit/loss set off or carry forward
if ur query is about the set off of business loss from prop business against his profit from firm means you cant because already the profit part received from firm is taxed in the hand of firm its not going to be taxed again in your hand.
salary received by the partner from partnership firm will be treated as business income only then you may able to set off against the Loss.
either the case you cant obt presembtive taxation since you r going to show loss.
my query is if partnership firm showing losses , that loss is set off with partners profit from another firm
No Firm's loss cant be set off against parner's profit
It will be carry forward to next year to set off in firm's books but you filed you firm's return under presemptive basis then you cant carry forward the losses.
as per presumptive income, partnership firm no need to prepare books of accounts
yes. you need not to maintain books of account and to prepare final accounts. but under presemptive taxation u cant show loss. then how can you set off losses which is not at all disclosed in the return. If you want to carry forward the loss then u should file the return with audit report and you need to prepare and maintain accounts. then also you can only carry forward the loss in firm's books and cant set off in the partners returns
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