Taxability of interest income

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 June 2016 Sir,

If a salaried employee takes a personal loan and further gives loan to some other person. He is receiving interest say 20000 (after TDS) from such other person and further paying interest say 16000 on loan taken on his personal capacity.
Now on in the hands of the salaried employee what amount is taxable. ie on 20000 or 4000.

Q1) Can he file his return under business income along with salaried showing reciept of 20000 and payment of 16000 and paying tax on 4000 net

Please respond asap!!!!!!!

please respond asap!!!

Amol S Joglekar

Amol S Joglekar (Expert)
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26 June 2016 an amount of interest receivable is taxable i.e. 20,000
No deduction per se is available except for the expenditure incurred for collecting the interest

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Querist : Anonymous

Querist : Anonymous (Querist)

26 June 2016 sir,

thanx for your response. sir can you please let me know the sections as per which this is taxable. or is there any case law for this

Amol S Joglekar

Amol S Joglekar (Expert)
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26 June 2016 in fact GROSS interest will be taxable......i.e. 20,000+TDS
section 2 defines INCOME.
Please note the definition is INCLUSIVE definition

Querist : Anonymous

Querist : Anonymous (Querist)

01 July 2016 sir,
can you please quote me the exact section which allows or does not allow interest to be disclosed as income along with expense. and if there is any case law which allows or does not allow for this do let me know.plzzzz

Amol S Joglekar

Amol S Joglekar (Expert)
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04 July 2016 incidental expenses incurred to collect the interest is deductible....section 57

http://www.incometaxindia.gov.in/Pages/acts/income-tax-act.aspx