Interest on loan or depositer

This query is : Resolved

jay (Querist)
Follow

31 December 2013 Sir,

I want to know how much interest rate is allowable in income tax act for f.y 10-11.I have proprietory business and We paid Interest to loans taken from relatives and interest paid 18% p.a on loan amount.We also deduct tds 10% from Interest and paid via chalan and also filed our tds return.Our Depositer also files his personal return.And also mentioned interest income in his return and also paid selfassessment tax on his personal income.So i want to know that the assessing officer disallow the interest rate 18%.Kindly any judjement in this matter as per your knowledge please give reference.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
Follow

31 December 2013 Actual int paid or payable for the year is allowed.

Nikhil Kaushik

Nikhil Kaushik (Expert)
Follow

31 December 2013 see excessive interest paid to related party can be disallowed under 40A(2)(b).

However, to disallow, the AO needs to establish that the said interest was excessive.

There are cases where 18% to 24% interest has been held as reasonable. please refer ACIT Vs.Raj Steel Industries, in ITA No.2245/Ahd/2010 and in the case of Vipul Y. Mehta Vs. ACIT, ITA No.869/Ahd/2010.

you can also refer Indus Technical Education ... vs Department Of Income Tax on 28 June, 2013 (ITA Nos.296 and 297/LKW/2011)

Sunder Forging, Ludhiana vs Department Of Income Tax on 18 December, 2012 ITA No. 968/Chd/2012

Message likes : 2 times

jay

jay (Querist)
Follow

31 December 2013 Thankyou Verymuch Sir,

For your most valuable and very helpful answer to us.
Thanks again.

Nikhil Kaushik

Nikhil Kaushik (Expert)
Follow

31 December 2013 You are welcome jay

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Join the CA Students WhatsApp Community for ICAI Updates, Trending Courses & Notes!

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

kavita goel

avulaandcopdrl 2023

divakar podaturu

Ashok Atluri

CA Reshma prabhu

Subscribe Now

Interest on loan or depositer

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Senior Executive

Manager- Finance and Compliance

GST CONSULTANT

GST CONSULTANCY

Accountant

CA Final

Article Assistant

Associate CA