interest on loan taken for residential flat in proprietorship firm

[sachin shilamkar]

We are planning to purchase residential flat in the name of proprietorship firm as guest house for the same we are taking loan from bank.

Can we claim entire interest as business expenses in the firm's account. Proprietor is already having home loan in his personal name for the existing property which is self occupied.

Regards

Sachin

AI Summary

Interest Deductibility for loan on flat used as guest house depends on loan holder and business character.
Deductibility of interest for a loan on a flat used as a guest house hinges on who holds the loan and the activity's business character: if the loan is in the proprietor's name interest may be claimed; if in the firm's name one view disallows interest but allows maintenance deductions while another view allows full interest where the guest house is the proprietorship's business.