Question

Income tax in case of sale trader in treated as

Answer 1

Answer:

Explanation:

For a Sole Proprietor, income tax is not an expense incurred to generate revenue hence it is not treated as an expense to be paid out of profits. In this case, income tax is treated as a personal expense resulting in drawings from the business concluding to a reduction of capital.

Answer 2

Explanation:

When the trader has done trading in listed shares and securities with the intention to invest and hold, the income from sale of such shares is classified as Capital Gains. Long Term Capital Gain is chargeable to tax at 10% (exempt up to Rs.

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