Interest on loan secured and unsecured

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This discussion explores the tax treatment of interest when an individual takes a secured loan from a bank and then lends that money as an unsecured loan to a relative. It addresses how to declare both interest payments to the bank and interest received from the relative when filing tax returns, including the deduction of TDS and the potential to offset expenses. The advice suggests showing this in the 'other income' schedule and claiming the bank interest as an expense, even without a balance sheet.

pooja

pooja (Querist)

20 July 2023 An individual has taken secured loan from bank and has given that loan amount to his relative as unsecured loan, now how should interest amount be treated while filing return, the person to whom loan is given is deducting tds while making payment of interest but how both the interest be treated, on one side paying to the bank and on other side receiving interest from the other person, can we deduct interest paid on loan to bank from interest received from unsecured loan while showing interest in other sources income, how to show both the interest amount
Thank you in advance