29 September 2009
My client took loan from ICICI and few instalments are due as on 31st march 2009. Can we claim the interest for the financial year 2008-09.
29 September 2009
I disagree with Chintanji, please see the section notes below:
Certain deductions to be only on actual payment. Sec. 43B. (d) any sum payable by the assessee as interest on any loan or borrowing from any public financial institution or a State financial corporation or a State industrial investment corporation], in accordance with the terms and conditions of the agreement governing such loan or borrowing.
Explanation 3 to sec 43B : For the removal of doubts it is hereby declared that where a deduction in respect of any sum referred to in clause (d) of this section is allowed in computing the income referred to in section 28 of the previous year (being a previous year relevant to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year in which the liability to pay such sum was incurred by the assessee, the assessee shall not be entitled to any deduction under this section in respect of such sum in computing the income of the previous year in which the sum is actually paid by him.
Explanation clearely says that the interest payable will be allowed in the year of payable & same will not allowed as deduction in the year of payment.
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