20 November 2014
I am filing my return as Tax Consultant. I have joined new partnership firm of Manufacturing. In first year we will have Loss. What will be the effect in my personal return of Business Loss. Whether can I get setoff of loss against my Professional Income?
20 November 2014
it is allowed to set off business loss with business profit no matter both business are different. Only business loss from speculative business cannot be set off from non speculative business. But you cannot set off loss from partnership firm.
20 November 2014
1. Profit of a partnership firm is exempt in the hands of the partners. Similarly loss of partnership firm has no impact on the income of the partner.
2. Only the partnership firm can set off or carry forward & set off the loss.
3. The partners CANNOT set off the loss of the FIRM from their individual income.
4. The FIRM can carry forward the loss for 8 Assessment Years.
20 November 2014
Thanks for reply. Say for example. I have professional income of Rs. 350000/-. In the same year My firm Business Loss is say Rs. 15,00,000/-. Remuneration is 150000/-. What will be treatment in my return?
Querist :
Anonymous
Querist :
Anonymous
(Querist)
20 November 2014
Partners profit sharing ratio is 33.33%.
20 November 2014
Thanks. Whether I have to transfer all Loss to Capital account of Partners? i.e. 33.33% to each 3 partners? And if yes, what will be the effect in my personal return and accounts? Under which head I have to show it in my return?