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sharad (partner)     13 March 2012

Can interest income can be set off against business loss

i may have interest income from loan given to tune of 4 lacs next year. and running one sole proprietor of business firm.  

can i set off my interest income against my sole proprietor's firm business loss in same year

 7 Replies


praveen (Chartered Accountant)     13 March 2012

yes you can set off

Rajnikant Vadigoppula

Rajnikant Vadigoppula (CA, CS And CMA Final)     13 March 2012

yes i agree with praveen u can go for setoff

Anooj (Chartered Accountant)     13 March 2012

Originally posted by : praveen

yes you can set off


CA ROSHAN (Partner)     14 March 2012

You can setoff provided your business is neither of:

1.Speculation Business

2.Business Specified under Section 35AD of Income Tax Act,1961.


Mohan (Accounts Mgr)     14 March 2012

I think it is not possible to set off of Business loss by Interest Income . According to I.T. Act "Because business loss can be adjusted only against business income" .  But if you had taken loan from bank  and the same has been given to

some other party the earned interest may can adjust to interest paid to bank.  If not you are doing money lending

business by your own funds it should be fully taxable.



CA SACHIN VIJ (Chartered Accountant)     15 March 2012

Yes you can claim the business loss (not speculative) in the current year with the income under the head other sources. There's no doubt in it.  

Sonam Bidasaria

Sonam Bidasaria (CA)     15 March 2012

Inter Head Adjustment is permissible only in the first year in which loss was generated. That means, if u have any business loss (Other than speculative or specified business loss), it can be adjusted with interest income or any income other than salary of that Asst Year.


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