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Morgage loan interest

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Nitin Dalsania

30 Points Posted on 27 May 2021

shop purchased on morgage loan from bank as a investment and for rent income.

can i take interest on loan as a expenses in profit and loss account?

Replies (3)

Quick Summary

If you've taken out a mortgage loan to purchase a shop for investment and rental income, you can't claim the interest as a business expense in your Profit and Loss account. Instead, the rental income is taxed under 'Income from House Property'. Crucially, you can claim the interest paid on the loan as a deduction against this rental income, in addition to the standard 30% deduction allowed.

Sivaramaraju G

Learner

1307 Points Posted on 27 May 2021

It won't come under profit and loss account as it is not for business purpose.

rental income from shop will be taxed under income from house property and interest paid for loan taken to purchase shop can claim deduction.

CA. Sourav Sarkar

Chartered Accountant

16188 Points Posted on 27 May 2021

Agree

veerendar singh

tax consultant

1829 Points Posted on 27 May 2021

under the head house property the taxpayer can take deduction of interest payable on loan taken for acquiring such shop. this deduction is in addition to the standard 30% deduction.

if you are recording transaction in books of accounts then you may record it as an expense in P&L but while computing income under the income tax act you have to take such rental income under the head house property.