CAF-2 · Chapter 12 · Question 7 of 15
During the tax year, an AOP incurred a net business loss of Rs. 1,500,000. Partner A, who has a 50% share in the AOP, earned a personal business income of Rs. 2,000,000. Can Partner A set off his share of the AOP's loss (Rs. 750,000) against his personal business income?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) B) No, the share of loss from an AOP is neither adjustable against the income of its members nor considered for rate purposes; only the AOP can carry it forward.
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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