Holi Offer: 10% OFF on CAclubindia Pro. Subscribe Now! Use Code: HOLIPRO10

Partnership firm get interest on bank fdr

Tax queries 937 views 10 replies

Neha jain

audit assistant

55 Points Joined April 2016

sir my question is that

if any partner ship firm doing business , he get advance money from debtors ., so he collect extra cash . so firm make bank fdr for few time , he get bank interest on fdr

so my questtion is that

1. income of this fdr interest , will conciderd as business income or other source income ?

2 if it have conciderd as other source income , will it set off against business loss ?

Replies (10)

Ruchi

1410 Points Joined March 2015

I think it will fall under business income head itself.

sahil

student

127 Points Joined December 2015

1. other source i think

CA. Haresh Parmar

Chartered Account

27 Points Joined May 2015

In my opinion it is business income as it is temporary/ short term investment out of excess fund of the business.

Pratik vora

Proprietor - Pratik Vora & Associates

39 Points Joined April 2012

It shall be taken as a business income, as the funds infused in FDr belongs to business.

Intrest Income will be covered under Income under Other Sources. Firms business may be Manufacturing or Trading but not making deposits in bank , so Intrest on Deposits will be considered as Income from Other Sources.