Interest not paid

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Querist : Anonymous

Querist : Anonymous (Querist)

21 May 2012 hello guys
company has not paid interest on loan taken from bank, so can company claim as expenses or not, if not then under which section under i.t. act?

if bank treated this loan as NPA then what should company treated this liability in its book(accural basis)?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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21 May 2012 If interest is not paid before due date of filing the income tax return u/s 139(1), it can't be claimed as an expenditure by virtue of the restrictions as in section 43B of the Income tax Act,1961.
Company has to necessarily follow "accrual concept" of accounting hence interest has to be recognized in books of the company though lender treated the loan as NPA.

Querist : Anonymous

Querist : Anonymous (Querist)

04 July 2012 thanks ......

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