Section 57(iii) of income tax act 1961

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VIJAY MALIK

40 Points Joined June 2017

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 Joined July 2018

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 Joined June 2017

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 Joined July 2018

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.