Treatment of interest on loan


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Querist : Anonymous

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Querist : Anonymous (Querist)
12 May 2015 One holding company has taken a loan for investment in equity of its subsidiary who is setting up a plant.

The interest on loan has to bear by the holding company.

Is it possible to show the interest amount as deferred revenue to be amortise in a period of 5-10 years.



What is the treatment of such expenses under income tax.

16 May 2015 depends on the structuring of the loan documentation. Ideally it wont make much difference as for as deductor is concerned as you still have to make provision and deduct TDS on the same.

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Querist : Anonymous

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Querist : Anonymous (Querist)
18 May 2015 Thanks for the reply


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