Hi friends. I have a doubt regarding allowability of interest on interest on unsecured loans.i.e., i have taken an unsecured loan and the interest accrued was added to loan amount because of non payment of interest. Next year i have calculated interest on the whole amount(principal+interest). Whether the interest on interest allowed as deduction u/s.36 of the IT Act,1961?.
Menu
INTEREST DEDUCTION
Replies (1)
Mr.Krishna Prasad
The deductibility of the imugned interest depends on the following two points-
(1) The terms and conditions of the borrowal i.e. the payment of interest is on simple interest method or cumulative interest method
(2) The method of account regularly followed by the assessee.
Best Wishes
Sathikonda
Recent Topics :
Related Topics :
ARTICLESHIP
07 September 2026
Article/ Paid Assistant
Murali and Sumeet Chartered Accountant
Bengaluru
CA Foundation
View Details
08 September 2026
Semi-Qualified Assitant
Subrahmanyam & Sivudu CA Firm
Hyderabad
CA Inter
View Details
ARTICLESHIP
15 September 2026
Freelance Taxation Content Writer Intern
Interactive Media Pvt Ltd.
New Delhi
CA Inter
View Details
CCI
Pro
CAclubindia
