Respected Experts,
If a member of HUF pays interest to HUF on loan taken from HUF then interest expenses can be shown under Income from other sources head if i have also shown interest income from FD?
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Interest Paid to HUF
Replies (8)
Quick Summary
For what purpose the loan was taken?
Loan was taken for investment in FD
In that case you will have to pay full amount of interest earned to HUF, as banking is not your business, and ITO would not allow such income distribution.
In short it means I can't pay interest to HUF as banking is not my business. Correct?
The reason is you have taken loan for investment in FD, which HUF can directly make investment.
Otherwise, you can take loan and if required, can pay interest to HUF also.
Thanks a lot for your valuable response.
You are welcome.
I hold diifetent views. you can lain it as deduction under interest income, so long as it is reasonable and there is clear nexus between loan funds and investment in bank FD.
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