Interest on Unsecured Loan
This query is : Resolved
02 December 2009
IF A BUSINESS MAN HAS TAKEN UNSECURED LOAN AND HE HAS NOT PAID INTEREST ON IT IN THE YEAR IN WHICH LOAN IS TAKEN.BUT IN THE SUBSEQUENT YEAR THE INTEREST IS PAID ON THE OPENING BALANCE WHETHER THE SAME CAN BE DISALLOWED IN THAT YEAR AS PRIOR PERIOD INTEREST.
02 December 2009
The Interest on loan is allowed only on payment basis (Refer Sec. 43B of IT Act)
therefore no interest can be disallowed by calling prior period interest
therefore no interest can be disallowed by calling prior period interest
02 December 2009
If interest is provided for , then it will be allowed in the year in which it is provided for. But If no provision is made , then it will be allowed in the year in which it is paid.
02 December 2009
agree with CA.Shahzad sir
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