HI SIR
MY QUERY = I DID FD WORTH 1L AT 7% PA & DUE TO SOME NEEDS I TOOK LOAN FROM SAME FD OF 50K
AT 8% PA NOW =
7000/- EARNED FOR 1L
4000/- CHARGED AS BY BANK FOR 50K
NET = 3000/- I EARNED
QUERY = NOW IN INCOME TAX WHETER ONLY FOR 3000/- I NEED TO PAY ITR OR FOR WHOLE 7K I NEED PAY ITR
PLZ ANSWER THANKS & REGARDS
Declare interest income as 7 K...
For income tax purposes, the entire ₹7,000 interest earned on your fixed deposit is taxable under the head "Income from Other Sources."
The ₹4,000 interest paid on the loan taken against your FD is not deductible while computing taxable income because personal loan interest is not an allowable deduction under the Income Tax Act unless the loan is used for a specific taxable purpose (such as business or investment in income-generating assets).
So, you need to pay tax on the full ₹7,000, not just the net ₹3,000.
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