https://www.taxtmi.com/article/detailed?id=5531 Interest on loans or overdrafts obtained against a continuing fixed deposit receipt is commercially connected to preserving the deposit's interest-earning capacity; such borrowing provides liquidity without prematurely encashing the deposit and reduces net interest burden. If borrowed funds are used for business or to acquire income-producing assets, interest may be allowable as business expenditure or under the relevant income head; where interest is incurred solely to maintain the deposit it may be treated as an allowable expenditure for earning interest on the FDR/TDR. Claims depend on the factual matrix and utilization of loan proceeds. en-us Thu, 20 Mar 2014 06:10:53 +0530 Thu, 20 Mar 2014 06:10:53 +0530 TaxTMI RSS Generator https://www.taxtmi.com/article/detailed?id=5531 Interest on loans or overdrafts obtained against a continuing fixed deposit receipt is commercially connected to preserving the deposit's interest-earning capacity; such borrowing provides liquidity without prematurely encashing the deposit and reduces net interest burden. If borrowed funds are used for business or to acquire income-producing assets, interest may be allowable as business expenditure or under the relevant income head; where interest is incurred solely to maintain the deposit it may be treated as an allowable expenditure for earning interest on the FDR/TDR. Claims depend on the factual matrix and utilization of loan proceeds. Articles Income Tax Thu, 20 Mar 2014 06:10:53 +0530 https://www.taxtmi.com/article/detailed?id=5531