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Interest on unsecured loan

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(Querist)
29 December 2012 Interest on unsecured loan should be debited to capital account or should be considered to compute gross total income. If taken directly to capital account it will reduce capital and if routed through P/l it will reduce tax liability as the loan is taken to earn income.
Please tell me what will be the right accounting and tax treatment
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deepali agarwal

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deepali agarwal (Expert)
29 December 2012 Interest A/c Dr.
( Grouped Under Indirect Exp.)
Mr. A A/c Cr.
( Grouped Under Unsecured Loan)
T.D.S A/c Cr.


If interest Is greater than 5000/-
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