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
- Tax on Deemed Capital Gain
- Type of Capital Gain
- Exiting partner in partnership firm in gst portal
- TDS on property - Form 141 query
- F & O PROFIT REPORTING FOR AY 2026-27
- ITR-3 File/Error Found
- ASMT-10 received from A O
- Applicability of Books of Account for Commission Income (Sections 194D & 194H)
- TDS _Long term Capital Gain ref.sec 214 Table 2
- IT returns for fresh job holders
- Housing Society-ITR5
- TDS on Rent received on redevelopment of building
- Indian IT Portal issue in computing tax as per UK-India DTAA
- Capital Gains on sale of residential flat
- Upload Level ValidationITR3Category of Defect B/D
- PF Taxable Income
- Clarification on Tax Audit Applicability and Reporting of F&O Transactions in ITR-3
- Interest credited in FY2025-2026 & TDS therein by EPFO does not reflect in AIS or Form 26AS
- 44ad eligble money lending interest
- Taxation in the hands of Landowner under JDA
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
