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RAJENDER (ACCOUNTANT) (40 Points)

29 January 2008

I just want to ask that if somebody has taken a loan from Bank against House property which is let out and gave the loan amount to his Company as a loan where he do job.Then at one instance he is earning interest on loan from Company and other instance he is paying interest to the Bank.

Can he claim the interest paid to the Bank agaist interest earn from u/s56.

Please answer with Section .

waiting for reply at rsinghkirrola @ yahoo.com

Raj

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2 Replies

Kapil Bajaj (Service) (112 Points)
Replied 29 January 2008

Yes,deduction of interest paid to bank is deductible u/s 57(iii)

Section 57
(iii) any other expenditure (not being in the nature of capital expenditure) laid out or expended wholly and exclusively for the purpose of making or earning such income

and since u have incurred such interest expense from bank for the purpose of earning interest income from company, which not being a capital expenditure.
u can claim such deduction.......