Deduction for converted interest allowed only on actual payment; apportionment required if interest is merged with principal. Converted interest (including Funded Interest Term Loans) does not amount to actual payment by mere conversion; deduction under section 43B is admissible only in the previous year when such converted interest is actually paid. Waiver of interest is not deductible. If converted interest is merged with principal and repayments are indistinguishable, the interest component of any repayment must be apportioned and only that portion is deductible. Assessing Officers may require lender certification to verify actual payment.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Deduction for converted interest allowed only on actual payment; apportionment required if interest is merged with principal.
Converted interest (including Funded Interest Term Loans) does not amount to actual payment by mere conversion; deduction under section 43B is admissible only in the previous year when such converted interest is actually paid. Waiver of interest is not deductible. If converted interest is merged with principal and repayments are indistinguishable, the interest component of any repayment must be apportioned and only that portion is deductible. Assessing Officers may require lender certification to verify actual payment.
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