22 February 2012
if we have fixed deposit and receive interest from it but if we take loan against that fixed deposit so paid interest on it.can we take this interest as deduction u/s 57 against receive int. on fixed deposit.
Guest
Guest
(Expert)
22 February 2012
Yes. It is possible to claim interest expenditure of loan. But the nexus between loan taken and amount invested in FD must be established before claiming deduction of interest paid on loan.
22 February 2012
No you can't take set off for interest paid against interest received. Please see Supreme Court decision in CIT V Dr.V.P.Gopinathan (2001) 248 ITR 449.
22 February 2012
As per that case law assessee made FD in bank and then took loan on security of that FD. The interest on that loan was not allowed but in that case law it is also mentioned that if the assessee had borrowed money on loan and then deposited the amount in bank as FD the interest paid will be allowed while calculating the income.
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