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
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.
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
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. .
CAclubindia
