Section 57
This query is : Open
Querist : Anonymous
Querist :
Anonymous
(Querist)
07 March 2012
A DIRECTOR OF A COMPANY TOOK LOAN ON HIS FLAT IN HIS NAME AND INFUSED THE FUNDS IN COMPANY.HE ADJUSTED THE INTEREST ON ABOVE LOAN TAKEN AGAINST HIS INTEREST INCOME ON FDRS.
HE TOOK THE LOAN IN HIS NAME TO SAVE THE INTEREST OF COMPANY AS HE GOT THE LOAN AT CHEAPER RATE IN HIS NAME.
IS THIS DEDUCTION OF INTEREST IS PERMISSIBLE U/S 57 OF INCOME TAX ?
PLS SUGGEST WITH CASE LAW IF ANY.
THANKS
HE TOOK THE LOAN IN HIS NAME TO SAVE THE INTEREST OF COMPANY AS HE GOT THE LOAN AT CHEAPER RATE IN HIS NAME.
IS THIS DEDUCTION OF INTEREST IS PERMISSIBLE U/S 57 OF INCOME TAX ?
PLS SUGGEST WITH CASE LAW IF ANY.
THANKS
CA PARAS BAFNA
(Expert)
07 March 2012
The loan taken from bank has not been invested for the purpose of earning the interest income (i.e. investment has not been done in FDRs). The fund has been utilised elsewhere.
Interest on loan is allowed against the income resulting from the funds of loan. It is not deductible U/s 57 as such.
.
Interest on loan is allowed against the income resulting from the funds of loan. It is not deductible U/s 57 as such.
.
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