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Deduction for interest paid.

Others 305 views 2 replies

T T Parwani

Others

86 Points Posted on 18 October 2018

My business income is 5 lakh, interest income 3 lakh. I have paid 2 lakh interest on my liabilities. What shall be my taxable income.
5+3-2= 6
or
5+3-75%of 2 = 6. 5 lakh.
which is correct.

Replies (2)

hanumantha rao

2 Points Posted on 18 October 2018

As per 57(iii), any expenditure not being a capital expenditure which was incurred wholly and exclusively for the purpose of earning such income is deductible from the income earned.But you have to prove that the loans on which interest is earned are the same loans on which interest is paid.

rahul

a

1620 Points Posted on 18 October 2018

agree with hanumantha ji

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