Interst set off

This query is : Resolved

Vinod Rai (Querist)
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11 June 2013 Hello every one.
I have simple query

I have given unsecured loans to parties and earning interest on it.
And i m also paying interst on o/d account.
Can i set off interest paid against interest earned ....
Plz give me answer

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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11 June 2013 i) If your business is money lending, O.K set off possible.

ii) If you declare income under the head 'income from other sources' set off is not possible. Please refer supreme court decision in Dr. V.P. Gopinathan's case wherein set off of bank o/d interest is denied against interest on bank F.D.

Vinod Rai

Vinod Rai (Querist)
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13 June 2013 Sir i m showing my income under other sources.
I m paying interest on Bank overdraft taken from bank and also receiving interest on Unsecured loan give n to parties....
It is already been done in last year return by our tax consultants.
I also think that it is not permissible in Income tax

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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16 June 2013 If mistakes are rectified then you will be less hurted. So, it's better, either to take the money lending license or to reduce the unsecured loans so that you will be at least get relieved from any potential liability.
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