In case of a proprietory concern, the proprietor receives a loan from his relative for purchasing a car for official use. He repays the loan with an interest @ 5% p.a. on a monthly basis. If the proprietory concern does not come under the tax audit category, will the interest be allowed as an expense as per Income Tax Act? Please Clarify.
Ofcourse there is nothing prohibiting allowance to such legitimate business expenses for Auditable and Non-Auditable assessees.
Yes the expenses will be allowable if the car is used for official purposes only.
There should be no scope for personal use.
there is nothing wrong in the treatment of unsecured loan
Yes the expenditure is allowable.
expernditure is allowable i guess ....because the car is used for official purpose Senior Citizen Deposits
Yes It is allowable
Yes the espenditure is allowable but also i am totally agreed wid Naresh Patel. So the same should be kept in mind.
Agree with Naresh,he gave the most practical answer..
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