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Section 43b of it act

Others 905 views 2 replies

Mridul Kogta

Chartered Accountant

36 Points Joined September 2008

Dear All,

As per section 43B, certain expenditures are allowed on payment basis only.

in case of payment of Interest to Bank ( CC A/c or term loan A/c ), if Bank has charged interest & debited the same in the customers CC account, whether the same amounts to actual payment of Interest to Bank or not (for the purpose of Section 43B) ?

Pls reply, & if possible kindly quote relevant case laws too.

Thanks

Mridul Kogta

Replies (2)

CA Akshay Kumar Mishra

Chartered Accountant

1784 Points Joined April 2009

As clarified in the Memorandum Explaining the provisions in the Finance Bill, 2006 (Page 3 thereof), the interest converted into loan or borrowing or advance shall be allowed if such interest has been actually paid and any interest which has been converted into a loan or borrowing or advance, shall not be deemed to have been actually paid on account of its conversion into loan, etc. refer circular no. 7/2006 , dated 17-07-2006