Sir Whether interest received from banks on Recurring Deposits can be adjusted with interest paid on loan taken from banks and others parties for computation of Gross Total Income for Individuals or Corporate assesse ? Whether the same logic is applicable for interest received on Fixed Deposits with banks ? Please advice .....
Saurav Kumar Banerjee.
Working Professional
Interest received on savings, deposit accounts are chargable to tax under the head icome from other sources as saving a/c and deposits a/cs are a type of investment of surplus funds. If you receive interest from the business of lending then interest received from such lending business is chargeable to tax under the head PGBP and interest paid on borrowings can be claimed as expense.
Even now if you use your borrow funds for your business, you can claim interest expense as deduction.
Aggarwal Sarawagi and Co
New Delhi
CA
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