Deduction of Interest

This query is : Resolved

Devendra (Querist)
Follow

16 April 2011 Mr. X a partner in M/s XYZ & Co. receives interest on capital. Also Mr. X has taken a personal loan and pays interest on the same. Can he deduct the interest paid from the interest received from P'ship firm?

Regards,
Devendra Kulkarni

CS ,CMA Shambhu Kr. jha

CS ,CMA Shambhu Kr. jha (Expert)
Follow

16 April 2011
Dear Devendra
it is just an accounting adjustment . While he is getting interest on capital and paying interest to the firm for personal loan taken form the firm .
As far i think it is valid and there ids no legal restriction for the same .

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
Follow

16 April 2011 If the personal loan is used for the personal purposes,interest thereon can't be set off against the interest income derived from the capital contribution.

Upgrade to CAclubindia Pro. Subscribe Now!