deduction of interest on unsecured loan
This query is : Resolved
06 May 2009
dear sir ,
can we take deduction of interest paid on unsecured loan/secured loan taken in personal capital a/c of individual. as loan invested in partnership firm as capital .
can we deduct it from remuneration and interest recieved from firm on capital or not.or what should be treatment of interest on loan.
please give me reference about the same
can we take deduction of interest paid on unsecured loan/secured loan taken in personal capital a/c of individual. as loan invested in partnership firm as capital .
can we deduct it from remuneration and interest recieved from firm on capital or not.or what should be treatment of interest on loan.
please give me reference about the same
06 May 2009
Yes, you can claim the deduction for interest paid on unsecured/secured loan against income generating from firm.
As the interest expenditure is incurred to generate the income, hence allowed as deduction in income tax.
As the interest expenditure is incurred to generate the income, hence allowed as deduction in income tax.
06 May 2009
Dear Dhwaval
Query is not very clear, however I assume that you are asking that if loan is taken in personal account by a person being a partner in a firm, the loan used for the business of the firm, can this be treated as capital of the individual in a firm. With this understanding my reply is that the firm is a separate legal entity from the partner. Unless the capital in specifically brought in to the books as capital of the partners it can not be treated as capital, However it can be treated as loan in the hands of the firm and payment of interest can be made to the partner. That interest will not be treatred for the purposes of calculating the remuneraion etc. of the parters. The income from interest on such loans to a partner would be treated as an interest income.
Query is not very clear, however I assume that you are asking that if loan is taken in personal account by a person being a partner in a firm, the loan used for the business of the firm, can this be treated as capital of the individual in a firm. With this understanding my reply is that the firm is a separate legal entity from the partner. Unless the capital in specifically brought in to the books as capital of the partners it can not be treated as capital, However it can be treated as loan in the hands of the firm and payment of interest can be made to the partner. That interest will not be treatred for the purposes of calculating the remuneraion etc. of the parters. The income from interest on such loans to a partner would be treated as an interest income.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- GSTR-1A How to update Invoice
- Excess salary payment.
- Current Account Opening for Sole Proprietorship with Udyam Certificate - Zero Turnover
- INTEREST APPLICABLE ON ITC REVERSAL PORTION
- TDS on Purchase of Immovable Property by NRI from NRI
- Capital gain from sale of house property
- Stamp Paper for partnership firm change new income tax 2025
- SFT Cash Deposit in Current Account
- Value of property in capital gain
- FORM 26A APPLICABILITY
- GST Treatment of Insurance Commission for Existing GST Holder
- Cash gift by grand mother to her grand daughter
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
- No Compliences after incorporation
- USEFUL LIFE OF USED/SECOND HAND COMMERCIAL VEHICLES
- Claiming TDS deducted by builder on Hardship compensation and Corpus
- Address Change to another state of a Registered Trust with 12AB approval
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
