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Tax benefit on interest paid on personal loan

Tax queries 342 views 2 replies

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)

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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