Bank Interest for purpose of share trading

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keshav bhattarai (Querist)
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12 September 2009 i have taken some amount from Bank against the morgage of my own house and i had used the money for the purpose of trading in shares. Lat year i beared a loss in shares and also paid heavy interest in Bank.Can i adjust the Bank Interest from Other in come (Commission received in my own company in which i m a director)

Late CA Sampat Jain

Late CA Sampat Jain (Expert)
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12 September 2009 BUSINESS LOSS CAN BE SET OFF AGAINST INCOME FROM OTHER SOURCES BUT NOT AGAINST SALARY INCOME.

THE ACT SAYS:

Set off of loss from one head against income from another.

SECTION 71. (1) Where in respect of any assessment year the net result of the computation under any head of income, other than â€œCapital gainsâ€, is a loss and the assessee has no income under the head â€œCapital gainsâ€, he shall, subject to the provisions of this Chapter, be entitled to92 have the amount of such loss set off against his income, if any, assessable for that assessment year under any other head.

(2) Where in respect of any assessment year, the net result of the computation under any head of income, other than â€œCapital gainsâ€, is a loss and the assessee has income assessable under the head â€œCapital gainsâ€, such loss may, subject to the provisions of this Chapter, be set off against his income, if any, assessable for that assessment year under any head of income including the head â€œCapital gainsâ€ (whether relating to short-term capital assets or any other capital assets).

[(2A) Notwithstanding anything contained in sub-section (1) or sub-section (2), where in respect of any assessment year, the net result of the computation under the head â€œProfits and gains of business or professionâ€ is a loss and the assessee has income assessable under the head â€œSalariesâ€, the assessee shall not be entitled to have such loss set off against such income.]

(3) Where in respect of any assessment year, the net result of the computation under the head â€œCapital gainsâ€ is a loss and the assessee has income assessable under any other head of income, the assessee shall not be entitled to have such loss set off against income under the other head.]

[(4) Where the net result of the computation under the head â€œIncome from house propertyâ€ is a loss, in respect of the assessment years commencing on the 1st day of April, 1995 and the 1st day of April, 1996, such loss shall be first set off under sub-sections (1) and (2) and thereafter the loss referred to in section 71A shall be set off in the relevant assessment year in accordance with the provisions of that section.]

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