Speculation Income
This query is : Resolved
16 April 2009
Hello sir,
A company whose principal business is purcahse and renting of properties has not generated any income in this year. But the general office, legal, preliminary exps w/off are debited to P/L amounting to Rs. 66000/-
Now the company earns speculation income by way of commodity difference amt to Rs.56000/- and interest on loan of Rs. 15000/-.
Which is the correct option:
1.Take the deduction of all expenses from speculation income,then speculation loss will be (66000-56000)10000/- which cannot be st off against int. on loan. Hence Total income - 15000
2.Show the loss from business as Rs.66000/- which could be set off with int on loan and Rs.56000 as speculation income. Total income-5000
Regards,
Jyoti Baid
A company whose principal business is purcahse and renting of properties has not generated any income in this year. But the general office, legal, preliminary exps w/off are debited to P/L amounting to Rs. 66000/-
Now the company earns speculation income by way of commodity difference amt to Rs.56000/- and interest on loan of Rs. 15000/-.
Which is the correct option:
1.Take the deduction of all expenses from speculation income,then speculation loss will be (66000-56000)10000/- which cannot be st off against int. on loan. Hence Total income - 15000
2.Show the loss from business as Rs.66000/- which could be set off with int on loan and Rs.56000 as speculation income. Total income-5000
Regards,
Jyoti Baid
16 April 2009
Yes, business loss can be set off against speculation income but speculation loss cannot be set off with other income.
17 April 2009
Thank you for the reply.
But please tell me the correct option as total income will vary in the above mentioned 2 options.
But please tell me the correct option as total income will vary in the above mentioned 2 options.
02 June 2009
.
03 June 2009
In the given case u have to follow second option only .Position would be as follows-
1. Income u/s PGBP
Normal- (66000)
Speculative- 56000
2. Income u/s Other Sources-15000
Loss u/h PGBP after intra head ad. – 10000
Income after inter head adjustment- 15000-10000=5000- Total Income
As u said u can not follow first option becaz –
1- For the purpose of computation Normal Business and Speculative is diff. frm each other
2- No expenses can be claimed against the income of Speculative business.
Anyway this option is more beneficial.
1. Income u/s PGBP
Normal- (66000)
Speculative- 56000
2. Income u/s Other Sources-15000
Loss u/h PGBP after intra head ad. – 10000
Income after inter head adjustment- 15000-10000=5000- Total Income
As u said u can not follow first option becaz –
1- For the purpose of computation Normal Business and Speculative is diff. frm each other
2- No expenses can be claimed against the income of Speculative business.
Anyway this option is more beneficial.
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