INTEREST INCOME GIVEN BY PROPRIETOR

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This query is : Resolved

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A proprietor is seeking advice on whether they can waive or reduce interest payments made to a friend for a business loan, particularly after being unable to pay in the 2020-2021 financial year due to losses. The core concern is understanding any potential implications under the Income Tax Act for not making these interest payments for the past year.

Arun Kumar M

Arun Kumar M (Querist)

16 February 2021 Dear All
I would like to know whether a Proprietor can waive the Interest Income which was paid by him for past years. The income is not paid in one financial year 2020-2021 due to covid-19. Is there any implications wit regard to Income Tax Act?

If cannot be waived, can it be reduced?

CA Altamush Zafar

CA Altamush Zafar (Expert)

16 February 2021 Your query is not clear. How can it be income when he has to pay it?

Arun Kumar M

Arun Kumar M (Querist)

17 February 2021 Sir,

I was referring Interest as Income from the person who is receiving it. Let me clarify, me being a proprietor is paying Interest to my friend for a loan he has given to my concern for the past 4 years. Suddenly in 2020-2021, Iam unable to pay the same due to losses. I was asking is there any problem for not paying such interest for a year? Whether Income tax implications are there for not paying?

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