Interest on unsecured loan to unrelated party

Hiee,,

Can Partnership firm give interest @ 42%P.A. on unsecured loan taken from unrelated party is allowed as expenses.

If not plz suggest me section under which it is disallowed.
Replies (2)
Quick Summary
This discussion explores whether a partnership firm can deduct interest paid at a high rate (42% p.a.) on an unsecured loan from an unrelated party as a business expense. The initial suggestion referenced Section 40(b)(iv) of the Income Tax Act, but this section pertains to interest paid to partners, not third parties. The core question remains about the deductibility of such high-interest payments to external lenders.

Please refer 40(b)(iv) of incometax act which will speak about disallowance of interest paid above 12% p.a.
Dear N M Reddy,

Section 40(b)(iv) is related to Interest to partner. My query is interest paid on unsecured loan taken from other party

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
15 October 2026
Senior Accountant

Continental Belting Pvt Ltd

Mumbai

B.Com

View Details
Company
08 October 2026
Accounts and Tax Associate

POOJA R TELI & CO

Pune

CA Inter

View Details
Company
26 September 2026
Chartered Accountant

pushpganga ventures

Pune

CA

View Details
Company
14 October 2026
Asst. Manager/Dy Manager (Costing)

manufacturing

Pune

CMA

View Details
Company
12 October 2026
AUDIT , ACCOUNTS AND TAXATION

KDSS

New Delhi

B.Com

View Details
Company
08 October 2026
SALES TELECALLER

HIRE NOVA

Lucknow

Graduate (Any)

View Details
Company
ARTICLESHIP 20 October 2026
CA ARTICLE

AMKN & CO

Noida

CA Inter

View Details
Company
10 October 2026
Accounts Associate Level 1

Abic and Mani Chartered Accountants

Kottayam

B.Com

View Details