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IndiaTax & ComplianceUpdated: Sep 13, 2026
Direct Answer
All fund transfers between your own bank accounts (e.g., from Current to Savings) must be classified as "Contra" entries. They are not income or expenses.
The Double-Counting Risk
Freelancers and proprietors often transfer funds from their business current account to their personal savings account. If you import both bank statements into your accounting software and classify all credits as "Income", you will double-count your revenue.
How to Book Contra Entries
- Identify the Pair: Match the outflow from Account A with the inflow to Account B on the same date.
- Journal Entry: Debit Account B and Credit Account A.
- Doing it in Software: Most accounting tools have a 'Transfer' button. Instead of 'Add Income', you click 'Transfer from...'.
Credit Card Payments
Paying your corporate credit card bill from your bank account is also a contra entry (Bank outflow -> Credit Card inflow). The actual expenses are booked based on the individual credit card transaction lines.