Intarest on car loan

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MALAY DAS (Querist)
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23 January 2013 dear sir
intarest on car loan of Rs 23355 for assessment year 11-12 is deductible or not
under sec 36? please advice me thanks...

Anand

Anand (Expert)
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24 January 2013 If the car is used for business purposes you are entitled to claim the interest theron

MALAY DAS

MALAY DAS (Querist)
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24 January 2013 dear expart
first thanks to you for replies but sir
but sec 36(1)(iii)said intarest paid on borrowed capital used for the business allowed as deduction but capital borrowed
for acquirng capital assets, and intarest liablity on loan till the assets put to use
cannot allowed as deduction from assessment year 2004-2005. here car is a capital assets. am I right or wrong, sir please clear to me. thanks.....

Anand

Anand (Expert)
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24 January 2013 you are right. until the asset is put to use you will have to capitalise. In most cases a vehicle is put to use immediately once acquired and hence i had not elaborated on the point.
So interest liab. post putting into use of the vehicle is certainly allowable

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