Solution on tax payable

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prashant vekariya (Querist)
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10 January 2012 whether it is possible to set off loss of discontinue business against interest income on loan still outstanding given from this business.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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10 January 2012 Interest Income is considered under the head of Income from Other Sources.
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If Business is discontinued then all the activity of earning income have been stopped or will be deemed so.
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In my view if you treat the business as running, what difficulties may arise to the assessee? . If no formal "Purnahuti" has been given, or required to be given, treat and hope it to be continued. If loan is in connection with the business interest may be set off, otherwise b/f business loss can be set off against current year's business income only.

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