loan interest as expenses

Hi Quicko,

I raised my capital for trading using a gold loan and i am paying 50k a year as interest and i am having 1 lakh profit. Can i claim interest paid on such a loan as a deductible expense?

@Quicko can you.

[As per Income Tax provisions] If loan is taken for business, interest paid on such loan is deductible as expense against business income.

If there is adequate proof that loan was taken only for the purpose of FNO trading and interest is paid on such loans before the due date of filing of return - you can claim it as expense/deduction.

If loan taken is a personal loan and used it for FNO trading (business purpose). It may violate the terms for which the loan was sanctioned.

More about expenses which you can claim…https://learn.quicko.com/expenses-trader-claim-income-tax-return

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Thank You

Hey @jithin_giri

Yes, interest on a loan can be claimed as an expense in case funds are used solely for trading purpose.

In case you have used funds raised from loan for personal use as well as trading, then you have to claim interest proportionately.

Hope this helps! :slight_smile:

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