Interest not paid (Income Tax)

This query is : Resolved

Author : Anonymous

( Author )
21 May 2012

hello guys
company has not paid interest on loan taken from bank, so can company claim as expenses or not, if not then under which section under i.t. act?

if bank treated this loan as NPA then what should company treated this liability in its book(accural basis)?

B.Chackrapani Warrier

( Expert )
21 May 2012

If interest is not paid before due date of filing the income tax return u/s 139(1), it can't be claimed as an expenditure by virtue of the restrictions as in section 43B of the Income tax Act,1961.
Company has to necessarily follow "accrual concept" of accounting hence interest has to be recognized in books of the company though lender treated the loan as NPA.

Author : Anonymous

( Author )
04 July 2012

thanks ......