Interest on unsecured loan

Hi

Is there any law or rule as per Act, which says that interest on unsecured loan from third party [apart from Gov/banks/institutions] should be paid in actual every year or one can keep on accumulating it and adding it to the principal balance ?

Any rulling or citiation refernce required regarding this matter.

 

Thanks.

Replies (3)
whether it's payable or paid, it should be included in the total income

Thanks Mr Rama.

Yes it is included in the total income of the assessee, but it is being accumulated Year on Year...Is this OK?

there's no bar ... it's up to you to receive or accumulate it to your outstanding loan amount.. it's permitted

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