Biggest tax evasion - capital gain in it act 1961
This query is : Open
16 November 2011
F.Y. 2006-07 In Loans and advances name of X shows by Rs. 5,00,000/-
After 4 Years(F.Y. 2010-11) capital gain arise Rs. 4,30,000/- (Assume after all calculation)
In that year i write off Mr. X's a/c as Mr. X is not eligible to pay my money.
So, Now Tax Treatment will be in LOSS (After set off u/s 70) Loss will be Rs. 70,000/-.
HEY MY FRIENDS ONLY EXPERTS WELCOME..........
After 4 Years(F.Y. 2010-11) capital gain arise Rs. 4,30,000/- (Assume after all calculation)
In that year i write off Mr. X's a/c as Mr. X is not eligible to pay my money.
So, Now Tax Treatment will be in LOSS (After set off u/s 70) Loss will be Rs. 70,000/-.
HEY MY FRIENDS ONLY EXPERTS WELCOME..........
17 November 2011
Firstly Section 71 will be applicable and not Section 70, becuase this is a case of inter-head adjustment, i.e., set-off of loss under PGBP against income under the head Capital Gain.
However, your tax treatment is correct, assuming there is no income under the head PGBP. So writing off loans is a bad debt and allowed as deduction, therefore it results in a loss.
But, my friend always remember one thing. Financial prudence prevails over tax planning.
By writing off Rs. 5 lakhs u r incurring a loss of Rs. 5 lakhs in financial terms, unless Mr. X is repaying the money in black.
So in effect, you will get a tax benefit of maximum Rs. 21,000 (30% of Rs. 70,000), but you will also incur a loss of Rs. 5 lakhs. Net effect will be loss of Rs. 4,79,000
However, your tax treatment is correct, assuming there is no income under the head PGBP. So writing off loans is a bad debt and allowed as deduction, therefore it results in a loss.
But, my friend always remember one thing. Financial prudence prevails over tax planning.
By writing off Rs. 5 lakhs u r incurring a loss of Rs. 5 lakhs in financial terms, unless Mr. X is repaying the money in black.
So in effect, you will get a tax benefit of maximum Rs. 21,000 (30% of Rs. 70,000), but you will also incur a loss of Rs. 5 lakhs. Net effect will be loss of Rs. 4,79,000
17 November 2011
Sir, Writing of loans is a bad debt ??? My friend this is not a business transaction then how bad debt.
Sirji writing of loans is capital loss and u write section 71 How???
Sirji writing of loans is capital loss and u write section 71 How???
17 November 2011
I assumed that the loan was for business purpose.
If it is not for business purpose, under which head are you claiming it as a loss??
It is not covered under the chapter of Capital Gains.
Section 70 deals with set-off of loss under one head with income under the SAME HEAD.
Writing off loans is not covered under the head Capital Gains.
If it is not for business purpose, under which head are you claiming it as a loss??
It is not covered under the chapter of Capital Gains.
Section 70 deals with set-off of loss under one head with income under the SAME HEAD.
Writing off loans is not covered under the head Capital Gains.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- ITC temporary reversal and reclaim
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- GST on export of services and Input Credit
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- TDS U/S. 194NF
- Applicable TDS rate for sale of property in Nov 2024
- RCM INVOICING FROM NOV-2024
- Import license renewal
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
- Regarding einvoice taken on nil rated sales
- Strategical investment in Public listed company
Trending Online Classes
CAclubindia
