Salary & business loss - Set off

Q & A Forum › Category: Tax Planning › Salary & business loss – Set off

dheerjspj asked 9 years ago

HI Assume a salaried person ventures into a business in partnership with someone in ratio of 50:50. We can assume the business to be say a Grocery Store and the partnership is a limited liability company. Now if the business incurs a loss then salaried partner also incurs a loss. Can he set off the loss in business against his salary income. If yes what all needs to be taken into consideration for claiming the loss in the financial year.

dheerjspj replied 9 years ago

Thanks for the quick response. Appreciate it !! One more question , so if the salaried person was to make a profit in the business then in that case how will he be taxed. Will the profits he makes from business be clubbed with his salary income to decide TOTAL INCOME ELIGBILE FOR TAX

Sreekanth Staff replied 9 years ago

Yes, the tax slab rate is applicable based on the total income from all Heads of income/sources.

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Sreekanth Staff answered 9 years ago

Hi, Kindly note that Loss from business and profession cannot be set off against income chargeable to tax under the head “Salaries”. Suggested reading : https://www.relakhs.com/set-off-carry-forward-capital-losses/