TDS & interest query

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This query is : Resolved

Gautam Patel (Querist)

24 September 2008 1. A Person to whom Sec 44 AB is applicable from this year whether expenses on which TDS is not deducted shall be allowed as business expense.(Last year Sec 44 AB was not applicable & the assessee has not applied for any TAN No.)
2. A loan has been borrowed by the assesssee for purchasing property .But the same was not used for borrowing & the amount was invested in FD & interest was earned.Whether the interest on loan paid can be claimed as business expenses.(the asseessee is dealing in buying and selling of properties & shares)

Ravikumar.G

Ravikumar.G (Expert)

24 September 2008 1)As per Sec 40(a)(i)(a)if TDS not deducted for an expense, that expense can't be allowed in tax computation. It will be allowed as a deduction in computing the total income of the PY in which the tax has been paid.Hence apply for TAN and deduct the tax.

Ravikumar.G

Ravikumar.G (Expert)

24 September 2008 2. The interest can claim as expense provided he has to offer the income from FD for tax.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

24 September 2008 Under the head income from business or profession interest paid will be allowed if interest income is also declared.
If shown under the head other sources interest paid will not be allowed u/s 57 as per supreme court ruling in Dr. v.p gopinathan's case.

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