Dear Experts
One of our client is charging interest from debtors for late payment of their dues. Under which head of income tax this interest income will be chargeable? Under "Business and Profession" or "Other Sources"?
Dear Experts
One of our client is charging interest from debtors for late payment of their dues. Under which head of income tax this interest income will be chargeable? Under "Business and Profession" or "Other Sources"?
It shall be taxed under the head of PGBP
As the debtors are related to the business, this will be treated as business income.
Should be shown as other income directly relating to the business under the head PGBP
Only under the head PGBP
keeping in view the provisions of section 28 which are as follows "the profits and gains of any business or profession which was carried on by the assessee at any time during the previous year" so by receiving interest the assessee is gaining something and the same is related to his business, therefore the interest should be taxed under the head PGBP.
Yes, it shall be charge under business income
simple, since it is related to business so it is business income so under the head of PGBP. not any under other head.
R P S K & Associates
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CA Inter
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CAclubindia
