Tax implication on loss of capital investment

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Respected Sir/Madam,

                      Please let me know how to treat loss from capital investment in partnership firm. Lets understand with a example

I am a partner in ABC & Co. It has been established in 2015 and made some capital investments of Rs.5,00,000. In my personal books i shown this as investment. Now we are going to dissolute the firm we dont have any machinery so i am going to incure loss of Rs.500,000.

(i) How to show this loss in my books, as a loss from investment? if yes short term or long term.

(ii) Which ITR i need to file

Replies (3)

No one have answer for this?

This doesn't affect your personal tax return. This loss is firm's loss. which is carried forward. If you are closing your firm then you cannot take its benefit in your tax return.

" In my personal books i shown this as investment."

Treat is as contribution in firm...... being partner's share........ will remain till firm is in existance.

At the time of dissolution of partnership firm........ the difference if any will be loss from partnership firm; which cannot be adjusted against any other income.

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