Loss from partnership

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Querist : Anonymous

Querist : Anonymous (Querist)

13 September 2012 A partnership firm has loss in its P & L for the year 2011-12. Is it necessary to pass on the loss to the partners or the loss can be retained in a reserve account and next year when the firm earns profit, then the loss of this year can be adjusted & then passed to the partners.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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13 September 2012 The loss will be shown in the Income Tax return of the firm and shall be carried forward for 8 assessment years.

Such loss shall be set off against business income earned in any of the subsequent years.

The loss will NOT be passed on to the partners.

Querist : Anonymous

Querist : Anonymous (Querist)

13 September 2012 Thanks a lot Sir. Thanks for your expert advice. Can you give me reference of any text or any book where it is written.

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