Interest on loan given not received

This query is : Resolved

kusum (Querist)
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24 March 2012 I have given interest free unsecured loan of Rs. 50.00 lacs but i have paid interest on unsecured loans which have taken.

I want to know whether any problem will arise in future due to above transaction at the time of scrutiny of income tax departmen. if yes

what i have to do

CA Kusum Sorathia

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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28 March 2012 There should not be any problem if the interest paid is at par with the rates charged by financial lenders.

Rupesh Jain

Rupesh Jain (Expert)
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22 May 2014 if you are claim intt as exp. then this exp will disallowed due to you are not earn any income agast this intt.

CA Kumar Mukesh

CA Kumar Mukesh (Expert)
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21 December 2014 Dear Kosum, interest on such loans shall be allowed only if it is used for the purpose of business profession.

In your case if advances given from that loans other than business purposes interest on such loans can be disallowed under section 37