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Interest Deduction Allowed Only for Business Loans, Not for Loans Financing Tax-Exempt Income u/s 36(1)(iii) of IT Act.
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....Interest expenditure could be allowed only if the loan was borrowed for the purpose of the business of the assessee and if it is used for the purchase of an asset which yielded exempted income, that interest expenditure cannot be allowed u/s. 36(1)(iii) of the Act.....