Interest on Share application money

As the share appliction money is not the share capital of company,Whether Interest on Share Application money paid by  Private Ltd. Co. is Allowed as Deduction under income tax act?
Replies (5)
Dear Sir

I am a silent member, as per the instant question "if any company is getting interest from the deposit money of Share Application Money ,then that amount will be taxable under the head INCOME FROM OTHER SOURCES in the Hands of Comapny.

I am sure this will give you a way to solve your problem .
Hi Avi,
          As Company is paying interest on share application money while refunding such application money,whether interest on such application money is allowed as deduction or not?
          I think now u will got the question
There is no  judicial precedent on this issue. However if the interest on share application money is as per the terms of agreement , it can be contended that the same is in the nature of debt and ithe nature of interest being in the nature interest on debt, it is allowable as a deduction.  Since the comapny is under an obligation to repay the money to the applicants in case the shares are not allotted, it may be contended taht the nature of relationship is that of a debtor and a creditor.

Respected Sir ,

             My father expired last year i have kept his ornaments in bank and got some 1.5 lakh . I invested 10000 in shares and got 2500 profit in 1 week . If i invest 100000 and if i get some 1.5 lakh profit in this year,should i pay tax for it.

profit (stcg or intraday)is taxable in your hands.

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