Due to a change in the tax laws, business losses cannot be set off against Salary Income w.e.f from 2005-2006 and you say you want to encourage entrepreneurship? If a salaried person gets into business and makes a loss, he has to nevertheless pay tax on the salary he earned, even if if lost all of it in business. This is a draconian law but in this country of illiterates and characterless people no one ever raised a voice when it was introduced two years ago.
