Tax benefit on interest paid on personal loan

Hi,

      In FY23, I worked for only one month (Apr 2022) as an employee of a firm and then was unemployed for the rest of the year. I took a personal loan and bought stocks (Equity - Cash Delivery) and sold the stocks after few months that resulted in Short term Capital Gains for FY23. Can I avail the tax benefit by subtracting personal loan interest from the Short Term Capital Gains ?

Thanks

Mani

Replies (2)
Quick Summary
This discussion explores whether personal loan interest paid on investments can be offset against short-term capital gains (STCG). While direct deduction against STCG isn't typically allowed as finance costs aren't recognised in capital gains taxation, there's a possibility to claim the interest expense if the share trading activity is treated as a business. In such cases, business income taxation permits the deduction of finance costs.

Yes, if you can corelate the loan taken for the purchase of the shares, but not under STCG.

No finance cost is not recognised in the capital gains taxation.
you can certainly claim interest expense if you report the share trading activity as a business. business income taxation allows finance costs.

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