Treatment of chit fund loss
This query is : Resolved
24 September 2013
Dear Sir,
My client is a member of Chit and has picked up his share of chit before its completion.
He has used this money for business purposes.
How do we account for loss on chit in our books and return.
The period of chit is for 25 months and cover 3 financial year.
1) Can we account for loss at the end of the chit period in the last financial year or
2) We have to show it on yearly basis proportionately after adjusting the dividend of that period.
The assessee is maintaining books mercantile basis.
Kindly clarify
My client is a member of Chit and has picked up his share of chit before its completion.
He has used this money for business purposes.
How do we account for loss on chit in our books and return.
The period of chit is for 25 months and cover 3 financial year.
1) Can we account for loss at the end of the chit period in the last financial year or
2) We have to show it on yearly basis proportionately after adjusting the dividend of that period.
The assessee is maintaining books mercantile basis.
Kindly clarify
24 September 2013
Proportionate amount has to be booked as chitty loss from year to year.
This loss can be claimed as a business expenditure as well.
This loss can be claimed as a business expenditure as well.
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