Tax exemptions amount limit on the interest paid by a PVT. LTD. Company

This query is : Resolved

Exclusive Content (Querist)
Follow

03 July 2023 Greetings,

I wish to know what is the limit of amount a private limited company can take exemption for the interest paid on the unsecured loan taken (Please note that this loan was from the Director to the Company)

Regards

RAJA P M

RAJA P M (Expert)
Follow

03 July 2023 if director ask Intetest then it will payable, no exemption.

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
Follow

20 August 2023 Any interest paid by a taxpayer on capital borrowed for the purposes of the taxpayer’s business or profession is tax-deductible without any limit. However, if such interest is paid to certain related persons (non-resident associated enterprise), then, the interest expense will be restricted to 30% of earnings before interest, taxes, depreciation, and amortisation (EBITDA). Excess interest expenditure disallowed in that year can be carried forward for eight years and would be available for set-off. If the capital is borrowed for acquiring a capital asset, then interest liability pertaining to the period until the time the asset is used cannot be allowed as a tax-deductible expense and will have to be added to the cost of such asset.

There are some specific guidelines for interest deduction being prescribed in ICDS.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now