Dividend from indian company

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 May 2012 I wanted to ask you that if loan is taken for purchase of shares &interest is paid on such shares to bank.Is such interest deductable from the dividend income received (indian company).please do answer my question as i know it is exempt from tax as ddt is paid.but i have a doubt about that deduction.

Thank You.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
Follow

22 May 2012 Expenses which are incurred in relation to an exempted income are not allowed as deduction from other incomes.

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
Follow

22 May 2012 If the shares are held primarily for the purpose of trading in shares and dividend income is incidental to such income then no disallowance of interest paid will be made u/s 14A.

Upgrade to CAclubindia Pro. Subscribe Now!

Ajay Mishra

Ajay Mishra (Expert)
Follow

23 May 2012 Hi

As per my knowledge, the company is not eligible to take loan from bank to invest in shares of other company. Please check your company's objects permit to do so.