Remuneration to partner would be tax deductible

I am a partner in a partnership firm on behalf of my Hindu undivided family (HUF). Will the firm paying me remuneration as a working partner get deduction from income?
The karta of the HUF is a partner in the firm as an individual, as a HUF cannot be a partner in a partnership. The remuneration paid to such a partner is in the capacity of an individual partner in the firm. The remuneration paid to a partner in a firm, even though as a karta of HUF, is remuneration to a partner and would be deductible under provisions relating to remuneration to partners.

I am in the business of purchase and sale of shares, debentures and earning dividend income. I had suffered loss in my business in the earlier year and the loss has been brought forward. In the current year, I have income from interest from debentures and taxable dividend income. Can I set off the brought forward loss against such income?
The brought forward loss in your case falls under the head, “Profits and Gains from Business or Profession”, whereas the interest from debentures and taxable dividend income are taxable under the head, “Income from Other Sources”. Legal position relating to carry forward and set off of losses provide that business loss cannot be set off against income from other sources. However, as you are a dealer in debentures and shares, the same are held by you as stock in trade and not as investments. Under such circumstances, the nature of interest from debentures and taxable dividend income is income from business, though the same is assessed under the head, “Income from Other Sources”. Therefore, you should be entitled to the impugned set-off.

Tarun Ghia is a chartered accountant and can be reached at ghiatarun@rediffmail.com. Pradnya Vairale is an advocate and can
be reached at advpradnyag@gmail.com.