Mr. X is a Salaried Employee earning income from salary & other source which includes interest on loan to other parties. Now, Mr. X Made a SOD Limit of Rs. 4 Lacs against his FDR of Rs. 5 Lacs. SOD Limit was used for the purpose of giving loan to people & earning interest. Now my question is, The Interst paid by MR. X on SOD limit is deductible against the interest earned on FDR & Interest Earned by the way of raising loan ?
Eg. Interest on FDR = 50,000
Interest earned via loan = 1,25,000
Less : Interest on SOD Limit = 45000
Taxable Interest = 1,30,000
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