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Income tax

mamta nangalia (student) (43 Points)

12 September 2012

Can anyone pls help me I have a client who has Salary income, house rent income, speculation business income,interest income. So my ques is He has Speculation of say 2000 and he uses Fixed assets like say a Car for his speculation income on which he claims depreciation of 200000, so nw under which heads he can set off his loss and unabsorbed dep??? Can he claim set off of dep of speculation business under other sources nd salary income????

Guys pls help.its urgent.

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4 Replies

CA Vishal Jain (Chartered Accountant) (137 Points)
Replied 13 September 2012

treatment of speculation loss is given in section 73 and sub-sec (3) of that specifically provide that unabsorbed dep in speculation business will be governed by the provisions of section 32, hence in your case you can set-off unabsorbed dep of Rs 1,98,000/- against oher income, balance, if any, can be carried forward in futire years without any limit

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Priya Awasthi (M.Com) (24 Points)
Replied 18 September 2012

I am not a tax professional and I am only answering this question because I feel it is my moral and social duty to do so. So do not expect any answers but please pay attention to what I write.

Your client is already earning through multiple means, i.e. through rent, salary, speculation (which I believe refers to the share market) as well as interest. Now considering that he is earning so well don’t you think he can afford to pay off a little to the country he lives in as well??

Regards

Priya Awasthi

efiling of income tax

CA Vishal Jain (Chartered Accountant) (137 Points)
Replied 18 September 2012

Hi Priya

It is right that if you are earning than you should pay the due tax to govt., but what mamta is asking is a different thing, she is asking about setting off of depreciation against other incomes as per legal provision. By claiming set off of depreciation you are not evading tax, depreciation is also your real expense and she will definitely suggest her client to pay the due tax.

one more thing i would like to share over here is that now every transaction in share market is not speculative transaction, even transaction in futures now come under normal business activity, only Intraday transactions come under the category of speculation now.