Please reply for the following query considering the below facts. 1. Interest Income Rs.10,00,000/- 2. Interest paid on Overdraft Rs.5,00,000/-
As per assess, Assess took the OD for earn some extra interest. He wants to adjust the interest exp. from interest income. He want to pay tax on Rs.5,00,000/- (Rs.10,00,000-Rs.5,00,000)
My contention: Interest income taxable under the head “Income from other source” therefore we should not allow interest on OD as a exp., we should not deduct it from income. But assess contention that he took OD for earn this interest income, principal of nature of justice, exp. should be deduct from income.
Please advise on the above matter in the light of Income tax provisions.
18 July 2013
If overdraft was taken for earning above income then it is allowed to deduct from the income earned.
Querist :
Anonymous
Querist :
Anonymous
(Querist)
18 July 2013
Sir, Individual earn this income and taxable in the head of “Income from other source”…as per my knowledge, in the head of other source, we cannot deduct any exp.
18 July 2013
As per sec 57 if exp is incurred to earn any taxable income chg to tax under head income from other source then such exp allowed to be deducted.
18 July 2013
Agree with Mr. Tushar. you can deduct intt on OD from your interest income. Section 57
Querist :
Anonymous
Querist :
Anonymous
(Querist)
18 July 2013
I made FDR with bank and earn interest Income. I need some money between FDR periods. Bank gives me overdraft facility in my account under the lien FDR. I paid interest on overdraft. Please advise, can I deduct overdraft interest from my interest income ??
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