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Monetary limit of allowance of interest expenses

HARDIK (ARTICLE) (105 Points)

29 December 2011

What is the monetary limit of allowance of interest expenses and remuneration expenses as per Income Tax Act, 1961 in case the firm has incurred loss during the year under consideration?

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sripal (article) (68 Points)
Replied 30 December 2011

as far as remuneration is concerned the firm can pay a maximum of Rs.1,50,000/- as remuneration.

since as per the provisions of sec 40(b):

90% of profits upto 3lac or 1,50,000/- which ever is higher.

the concern having a loss will result in the 90% figure of "0" and then higher of 1,50,000/- or 0.

for interest it can be paid upto a max of 12%.

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@*CS Siddharth Bumb. * (B.Com, CA Final, CS ) (5270 Points)
Replied 30 December 2011

Originally posted by : sripal
	as far as remuneration is concerned the firm can pay a maximum of 1,50,000/- as remuneration. since as per the provisions of sec 40(b): 90% of profits upto 3lac or 1,50,000/- which ever is higher. the concern having a loss will result in the 90% figure of "0" and then higher of 1,50,000/- or 0. for interest it can be paid upto a max of 12%.