Whether interest receipt on FDR can set off aginst interst paid on unsecured loan

This discussion explores the possibility of offsetting interest paid on an unsecured loan, particularly one taken from a relative, against interest received from a Fixed Deposit (FDR). It suggests that such a set-off might be permissible under the Income Tax Act, provided the interest rate on the loan is lower than that of the FDR. The concept of a weighted average interest rate is also mentioned as a consideration due to differing principal and investment amounts.