Deducting FD investment loss in Indian taxes

[Inspector]

Hi,

My Father, who lives in India, has considerable interest income (from FDs), and pays tax on that interest. Last year, one of the banks he used to invest with went down, and since Indian FDIC equivalent ensures only 1 lakh per account, we lost some money. Can we deduct this "investment loss" against the interest generated? Does it all have to be this year only, or can the loss be carried forward?

I checked a bit on the internet, and section 57 seem allow such a deduction (for "any other expenditure (not being in the nature of capital expenditure) laid out or expended wholly and exclusively for the purpose[SUP]12[/SUP] of making or earning such income"). Does anyone know something more definitive? Thanks.

Inspector