Set off against business loss and income from profession

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This query is : Resolved

Niranjan Chaitanya (Querist)

22 July 2014 Hi Folks,

I have query

Suppose XYZ is IIT pass out. Starts own venture but due to some reason start receiving losses in business few years down the line.
Freind of ABC is having company and he appoints Mr. XYZ as Technical Director.

Can Mr. XYZ can set off losses received in Business against remuneration received as technical director of the company. As both business losses and income from profession is falling under same head.

CA Mohit Bansal

CA Mohit Bansal (Expert)

22 July 2014 No. You can not take set off of business losses incurred in previous years as Director remuneration is taxable under the head salary and not business/profession. And set off of business losses is not available against salary income

Niranjan Chaitanya

Niranjan Chaitanya (Querist)

22 July 2014 If the director is not full time director.

CA Mohit Bansal

CA Mohit Bansal (Expert)

22 July 2014 Still it is taxable as salary, only when Director is not WTD/MD then remuneration would be taxable as Income from Other Sources, even in that case set off would not be available

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