Applicability of sec 57

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Lavina Ghadge (Querist)

15 July 2016 if a person received interest on compensation which is chargeable to tax after deduction of 50% of the amount u/s 57 bt if any expense like legal expense paid to get that compensatiion will also be allowed as deduction u/s 57 as it include a clause where any amt as expense paid for earning such income is deductible provided it should not be capital expenditure. will legal exp here is capital expenditure?

Kaushik Joshi

Kaushik Joshi (Expert)

15 July 2016 Dear Lavina Ghadge Legal expense in your case if it's directly attributable to earning the income which you've mentioned, then it shall be an allowable expenditure.

Kaushik Joshi

Kaushik Joshi (Expert)

15 July 2016 it is not a capital expenditure

CA. Sunil Gokhale

CA. Sunil Gokhale (Expert)

15 July 2016 No deduction from interest other than 50%. Additional compensation taxable under capital gain from which legal exps can be claimed as deduction.

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