Hi Friends,
I have a query regarding taxation of income.
A person has Salary Income of Rs.6 Lacs and in order to avoid tax burden he started Business in the name of his Minor Child and show the Loss of Rs. 4 Lacs from that business. He filed NIL Return after clubbing income of Minor Child into his income.
My question is " Is it the right way to avoid tax or not " ?
Thanks.
Business income cannot be set off against income from salaries.It is not possible to set off the business loss against income from salaries u/s 71/72.
If he shows loss from other sources.
a) in the name of minor
b) in his name
then what would be the treatment?
Then in that case he might have to substantiate the same.
In case of minor he might be further ask to show the reason of the same and if the same if not verified then will lead to penalty ,etc.
Shyam Joshi & Associates
Pune
B.Com
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