Setting business losses against interest income is it possible

Yes the business loss can be set off against interest income, but not against salary income...

Thanks Sir, just to understand more can you please confirm on below elaboration.

Apart from Salary - Interest Income: 1.5Lakh (Supposed tax on this 50K)

Started business with capital of 50K - Nature of business is trading of goods for resale.
FY:
Out of which goods purchased for 30K + 10K(Initial setup cost) + 10K (Marketing cost)
Sale of 10K
So as I understand 40K can be considered as loss for the FY

Question:
Can above 40K be setoff against 50K interest income tax and just pay remaining 10K tax ?



 

You are mixing up capital with revenue and tax liability...

In above case loss is just 20 K expenditure MINUS profit on sale of 10K ... say net 18K

This 18K is deducted from 1.50 interest income..... & then calculate tax liability...

Got it sir thanks

So the good in stock are not considered to be loss. Only the expenditure which can not be recovered. But in the end if I am not able to sell those goods can those be declared as losses.
I am just trying to see that if my taxes can actually fund my business.

Unless the stock is sold, be at scrape value (with specific reason/s), loss cannot be claimed...

Thanks for your help sir

Sir, As I was reading further with it seems if we have salary + business income we need to file ITR 4 if turnover is less than 2cr and there too if we have profit less than 8% the return needs tax audit from CA.

As I do not think I would be immediately in profit in first year itself does that mean my ITR would need audit by CA.

My whole idea of opening proprietorship is if I can adjust my losses against my taxes if I am in loss in initial years but do you think it would be better to choose a separate entity instead like partnership or LLP.

Can I still adjust those losses against my interest income if in loss.