please tell me what can be the probable consequencese in case the interest rates paid on unsecured loans taken by a partnership firm is more than 30% per annum and the firm has duly deducted TDS and submitted to the govt?
please tell me what can be the probable consequencese in case the interest rates paid on unsecured loans taken by a partnership firm is more than 30% per annum and the firm has duly deducted TDS and submitted to the govt?
11 October 2009
If your case selects for IT Scrutiny and Assessing officer does not allow 30% rate of interest payment, he may add back the interese expenses and may raise demand for tax payment. Before that, he may ask for parties confirmation for having received this interest payment. One thing always you should remember,Even if there is no prohibition/norms/restrictions for rate of interest, it should not be more than market rate and if it is, you should be able to justify the same.Thanks
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