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Section 57(iii) of income tax act 1961

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VIJAY MALIK

40 Points Posted on 04 August 2019

Related to section 56 and 57 of income tax act.

1st year = If A takes a loan(Loan against Plot) of 40 lakh and lend the same to B at some interest rate. In ITR of this year A shows interest income from B under income from other sources and deduct EMI interest(loan against plot).

2nd year : In this year A pays EMI of the loan(principal+interest) by taking another loan from C . In this year what should A take the deduction in respect of interest expenses

Please tell the solution keeping in mind section 57(iii) of IT Act , 1961

Replies (3)

RAJKUMAR TG

397 Points Posted on 04 August 2019

how r u going to repay loan from C..
FORGET ABT 57 III...
THIS IS A SET OF CHAIN EVENTS...
ULTIMATELY U WILL B IN A LOAN TRAP.
WITHOUT SOURCE OF REPAYMENT .... LOAN HAS NO VALUE...

VIJAY MALIK

40 Points Posted on 04 August 2019

i am asking just for how much deduction is directly relatable to income generated u/s 56 because as per 57 iii the expenses should be wholly and exclusively for generating income ,

RAJKUMAR TG

397 Points Posted on 04 August 2019

section 57 iii is purely established by case laws and circumstances involving the present case as brought about u.
no fixed rules.
u have to establish the fact ir is solely for earning the income and not in the nature of personal expenditure in case of individual assessee.
if u can establish thus fact before any income tax authority it is fine.