Interest on unsecured loan

Sumiti Jain (FP) (1364 Points)

14 September 2012

Is there any compulsion to pay Interest on Unsecured Loan or they can be Interest free?

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CA abhinandan agarwal (CA CS Bcom(H)) (174 Points)
Replied 14 September 2012

actually there is no compulsion but no 1 can give the loan interest free.so AO can raise the question for it.so its better to provide interest.

CA D R P (Chartered Accountant) (313 Points)
Replied 14 September 2012

ACTUALLY IT DEPENDS ON ASSESSEE.

IF IT IS A COMPANY THEN, IT IS MUST TO PROVIDE FOR INTEREST, [INDIRECTLY]...

IF IT IS A NON CORPORATE ASSESSEE THEN IT DEPENDS ON YOUR COMFORT LEVEL... AND OTHER TRANSACTIONS.

IN SHORT IT IS SITUATIONAL ISSUE.

THANKS.

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