interest free loan to karta
This query is : Resolved
01 November 2016
Can huf take a overdraft and give that amount as interest free loan to karta for business.
What will be the treatment of interest paid for such loan.
01 November 2016
Yes. That can be done.
If HUF is having a business of giving loan, then the interest paid on over draft can be claimed as allowable expenses.
If HUF is having a business of giving loan, then the interest paid on over draft can be claimed as allowable expenses.
01 November 2016
please specify the nature of business, so as to give better answeer.
01 November 2016
Karta is engaged in trading of food grains and gets compulsory audit ,karta also shows business income under pts @8% from trading activity.
01 November 2016
The business of HUF is NOT that of giving loan. So, the interest on overdraft wont be allowed as expenses.
01 November 2016
you are most welcome.
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