Loss from loan to wife for business

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This query is : Resolved

Kapil Khanna (Querist)

04 August 2012 I loaned X amount to my wife for business owned by her as proprietor. The business ran into losses and was shutdown. She has filed IT returns for the same showing losses.
Can I show the X amount as losses in my IT returns?
How to carry forward these losses?

Thanks,
Kapil

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)

04 August 2012 The Income/loss is assessed in the hands of your wife and not in your individual assessment.
Since, the assessee is different, you can not carry forward the losses.
However, your wife is entitled to carry forward the losses.

Kapil Khanna

Kapil Khanna (Querist)

04 August 2012 Thanks, but your reply does not help.
I need to take the benefit of the loss, because wife does not have income and setting off losses is not going to happen if wife does carry forward.
What benefit can I get for the bad debt / loan to wife?
Please give ideas.

Thanks,
Kapil

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)

04 August 2012 Even if in the current year there is no income in your wife's hands. Your wife can carry forward the losses for next 8 assessment years and losses can be set off in the year when she earns profit from the business.

Guest

Guest (Expert)

04 August 2012 You can show the amount as loss as bed debts in your P & L account.

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