CAF-2 · Chapter 11 · Question 4 of 15
XYZ Associates is an Association of Persons (AOP). During the tax year, the AOP incurred a business loss of Rs. 1 million. How will this loss be treated under the Income Tax Ordinance, 2001?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) B) It can only be carried forward by the AOP to be set off against the AOP's future income.
Explanation
Any member of an AOP shall not be entitled to set off or carry forward and set off the loss of the AOP against his personal income. The AOP itself is entitled to set off and carry forward its own losses.
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