Interest paid on I.T. / Interest received on I.T. Refund
This query is : Resolved
16 July 2011
1. When we pay interest due to delay in payment of Advance Tax or I.T. dues, is the interest paid a deductible expense?
2. When we receive interest paid by I.T. department along with an I.T. refund, is the interest amount a part of taxable income?
2. When we receive interest paid by I.T. department along with an I.T. refund, is the interest amount a part of taxable income?
16 July 2011
1. not delectable as exp
2. interest will be taxable
2. interest will be taxable
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16 July 2011
1. Income tax is not deductible as per section 40(a)(ii) of the Income tax Act,1961. As a corollary interest on such payment also is not a business expenditure.
2. Yes, under section 56(1) of the above referred act,since there is no specific exclusion in the said act.
2. Yes, under section 56(1) of the above referred act,since there is no specific exclusion in the said act.
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