Setoff of loss of other sources from business income

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 January 2013 One of my clients has loss from other sources [interest paid for loans and liabilities] and have business income [interest from partnership firm and share of profit from partnership firm. Can he set off the loss from other sources to income from business?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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21 January 2013 In general loss can be set off. In your client's case you have to observe that whether the loans taken were utilised in earning a taxable income or it has been utilised to meet personal liabilites.
Interest will be allowed only if he has incurred the expenditure in connection with his business, otherwise debit the same to Capital Account.

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Querist : Anonymous

Querist : Anonymous (Querist)

21 January 2013 Thanks a lot sir

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