Person borowed money form bank and give its futher to company to earned interest income
TOtal interest Received 50.00 lacs
Total Interest paid to Bank 52.00 lacs
My question is whether he is eligible for deduction of Rs 50 lacs or 52 lacs under section 57
Borrowed Funds Lending: Interest Paid May Qualify as Business Expense Deduction Under Section 57 Despite Legal Concerns A person borrowed money from a bank and lent it to a company, earning an interest income of 50 lakhs while paying 52 lakhs in interest to the bank. The query concerns eligibility for deduction under section 57 of the Income Tax Act for either 50 lakhs or 52 lakhs. The response by a Chartered Accountant highlights that lending borrowed funds is illegal under the RBI Act. However, the interest paid could be considered a business expense, allowing for a deduction, despite the legal issue. (AI Summary)
TaxTMI 
TaxTMI 
