Is interest received & interest paid can be setoff???

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 September 2013 Dear Memebers,
my assessee is director in a Company & he takse a bank loan in a personal capacity & he gave some amount to the company in which he is a director..the assessee receives Rs 1600000 as interest on loan..which he give to the company !! Also the assessee receives a salary of Rs 1200000 p.a from that co.
My Ques is in which head the interest amount is taxable either in Other source or in PGBP. & is interest amount given TO THE BANK IS ALLOWED PROPORTIONATELY ALLOWED AS SETOFF AGAINST RECEIVED AMOUNT OF INTEREST i.e 1600000/-

please give ur comment in this case

Arun Biyani

Arun Biyani (Expert)
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27 September 2013 It can not be set off.. both are separate transaction. further it is taxable under the head of Other Source, as giving the loan and earning interest is not business of your director..