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Tax on fd interest in under construction company

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Querist : Anonymous

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Querist : Anonymous (Querist)
28 September 2012 Dear Sir,

I own a underconstruction company under section 25 ( non profit organisation).

I have taken amount from various shareholders for the construction work. As my construction work is at a hold, I have invest the amount in Fixed Deposits with the Bank.

I had shown the interest from bank income under Pre-operative. But auditor says that it is income from idle fund hence income tax is to be paid.

Please guide, whether income tax is payable or not

Thanks in advance
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CA CS Amit S. Kedia

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CA CS Amit S. Kedia (Expert)
28 September 2012 If you do not have corresponding expenses like interest on loan taken, if any, then it will income of that particular year and if there is interest expense on borrowings then -
Pls read para 11 of AS-16-
Any income earned on the temporary investment of those borrowings is deducted
from the borrowing costs incurred.
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CA Lokesh Pokharna

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CA Lokesh Pokharna (Expert)
28 September 2012 which are objects of this co.?????? & how can you be owner of this co,?
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