Kumar (Others) (105 Points)
03 September 2021Folks,
For an Individual, are the bank locker rents paid deductible against Fixed Deposit or S/B interest from banks, for the computation of income from other sources?
In particular under Section 57?
Thanks
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 03 September 2021
Income and expenses can be setoff from the same source of business
JGM
(Knowledge Sharer)
(443 Points)
Replied 03 September 2021
As these charges are not incurred for earning bank interest, the same is not deductible
Gopinath MV
(Senior Analyst)
(50 Points)
Replied 03 September 2021
Exactly,
The interest is earned against SB/FD and expenses incurred to earn this income only admissible for set off against income.
Locker Rent is not an expense against earning income of the above, hence it is not allowed to claim as per Sec.57
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 03 September 2021
If you link your locker, you can setoff with interest income
https://m.economictimes.com/interest-on-locker-fixed-deposits/slideshow/59663606.cms
CA. Sourav Sarkar
(Chartered Accountant )
(24583 Points)
Replied 03 September 2021
JGM
(Knowledge Sharer)
(443 Points)
Replied 03 September 2021
@ Yasaswi - the ET article mentions adjusting of locker rent against the interest on FD. It does not say that for tax computation such adjustment is possible. In fact, it clearly states that the assessee need to remember offering such FD interest income to tax since there is high likelihood as the rent is adjusted against the locker rent, no entry is passed. To reiterate, only those expenses which are incurred exclusively to earn interest income can be claimed as deduction. Since the locker rent is not incurred for earning FD interest, the same cannot be allowed as deduction against FD interest while computing tax
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 03 September 2021
Dont worry, I only do reporting, cost and corporate financial management here and not taxation and auditing. I just involve myself once in a while.
CAclubindia
