Can interest paid be set-off from interest earned

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Hi

Have a question on claiming interest expense as a deduction. Personal loan has been taken on which interest is paid; the personal loan was used for investment in a real estate project on which interest is paid by the builder. Can the interest paid be claimed as deduction from interest earned; and whether this should be reflected as PGBP or Other Sources?

 

Thanks!

Replies (1)
Originally posted by : Vikas
Hi

Have a question on claiming interest expense as a deduction. Personal loan has been taken on which interest is paid; the personal loan was used for investment in a real estate project on which interest is paid by the builder. Can the interest paid be claimed as deduction from interest earned; and whether this should be reflected as PGBP or Other Sources?

 

Thanks!

It will be taxable under the head other sources (provided you are not in the business of real estate) and no interest paid will not be allowed as deduction because it doesnt satifsy conditions specified under Section 57 namely
"The expenditure must not be in the nature of Capital expenditure".


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