Income Tax on interest & Legal Fees
This query is : Resolved
02 January 2023
My NRI Friend wanted to purchase a Flat in Mumbai.He paid advance to the Builder.But the builders failed to construct the flat,and my friend filed a case against them.The court gave a verdict ordering the builder to pay back the advance amount along with interest.These payments were transfered to my Friend's NRO Account.He is an income tax assesse and has local income in india. Now my query is that ,is he liable to pay tax on the interest part of the sum received from builder or whole amount.Also can he claim deduction on the fees /expenses paid towards legal proceedings???
02 January 2023
Yes, Interest amount received is taxable..
He may claim, but may not be allowed by ITO..
He may claim, but may not be allowed by ITO..
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