Income tax
Rajat kumar Bandyopadhyay (Manager BOI) (24 Points)
20 March 2016
Can interest on loan against FDR be offset against interest income on same FDR for calculating taxable income
Rajat kumar Bandyopadhyay (Manager BOI) (24 Points)
20 March 2016
CA Chandra Prakash
(9873059766 Increasing knowledge through sharing)
(296 Points)
Replied 20 March 2016
NO, it is not allowed in income tax law.
Swami Ayyappa Nuli
(TAX ADVISOR & CONSULTANT AT G.S.T SUVIDHA CENTER)
(1372 Points)
Replied 20 March 2016
Agree with Chander, Any expenditure incurred to earn particular income can be claimed as expenditure for Income tax purpose. In your case, Interest paid by you on loan against F.D.R is not for earning Interest income on F.D.R hence can not be allowed against Interest income on F.D.R. But if such loan is taken for business purpose then it can be claimed as Business expense
rohit mundra
(ca, cs, b.com)
(70 Points)
Replied 20 March 2016
Swami Ayyappa Nuli
(TAX ADVISOR & CONSULTANT AT G.S.T SUVIDHA CENTER)
(1372 Points)
Replied 20 March 2016
There are two sections(Sec-57&58) which elborate Admissible and Inadmissible expenditures which are available as deductions for computing Income from other sources. Under section 57, it is specified that "Any other expenditure (Other than Capital expenditure) wholly and exclusively incurred to earn such income" is allowed as deduction against Income from other sources except in cases specified u/s.58 which include Personal expenses, Wealth tax, Expenses of nature disallowed u/s.40A and expenses in connection with winnings from Lotteries, Crossword Puzzles, Races, Gambling or Betting. Therefore except expenses specified u/s.58 each and every expenditure having direct connection to earn such income is fully allowed u/s.57
manoj
(student)
(5205 Points)
Replied 20 March 2016
No you cant get benefit of set off
As per Income tax Act it is other source income
and interest paid by you is definately used for some specific purpose so you cant get benifit of set off
Max Payne
(employed)
(2569 Points)
Replied 20 March 2016
Rajat, if you have a loan taken for business, CLAIM INTEREST as an expense u/s 36,subject to TDS provisions, sections 40A and 43B.
If you have FDR interest income and interest on loan payable, ordinarily it cannot be set off while calculating IFOS. However, as pointed out by Swami Ayyappa Nulli, section 57 provides deduction for expenses INCURRED TO EARN IFOS. If loan had been taken for the purpose of putting in FD, you could claim that interest on loan as expense for earning FDR interest income. Since in the present case there is loan was taken against FD and NOT FOR CREATING A SOURCE FD, no deduction available.
Summary: in IFOS, loan against FD no deduction for interest. But loan for FD, deduction is allowed.
Vijay Goyal
(Director)
(41 Points)
Replied 20 March 2016
Vijay Goyal
(Director)
(41 Points)
Replied 20 March 2016
CA Mehta Ankur N.
(Proprietor)
(2028 Points)
Replied 19 April 2016
You can claim against taxable income.
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