02 September 2013
I have audited the financial statements of a government company registered under section 25 of the companies Act.it earns interest income from fixed deposits which is taxable under the head "income from other sources".It has business loss also for the same financial year which is set off against the interest income,hence net income earned is Nil.Therefore the company does not create any provisoin for taxation on the interest income earned.I would like to knoe whether the company should create any provison or not and what kind of opinion will i have to provide?Unqualified opinion or qualified to the above note
02 September 2013
Business loss can not be adjusted against income from other sources. so the company is liable to pay tax on interest on fixed deposit.
CAclubindia
