suppose, I purchased plant and machinery and I take loan on it...moreover I transfer it on lease to someone.
now, annuity method will be considered here...
my question is ...interest on loan which I pay will be my expense and interest on lease is my income..
can I setoff interest expense against interest income???
8 Replies
CA Rashmi Gandhi
(Chartered Accountant)
(86323 Points)
Replied 18 June 2022
Expenses made for earning income is allowed to set off
chaitri kharod
(115 Points)
Replied 18 June 2022
As per income tax , we can setoff the expense against income..but as per accounting , we can mention both in plant and machinery account..
like..
1.)depreciation account Dr
to plant and machinery
2) interest on loan account Dr
to loan account
3) plant and machinery ac Dr
to interest on lease account
is it correct???
like..
1.)depreciation account Dr
to plant and machinery
2) interest on loan account Dr
to loan account
3) plant and machinery ac Dr
to interest on lease account
is it correct???
sabyasachi mukherjee
(27574 Points)
Replied 19 June 2022
Depreciation annuity method is basically not required.
CA Rashmi Gandhi
(Chartered Accountant)
(86323 Points)
Replied 19 June 2022
Read the query first @ sabyasachi
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