The amount of the interest paid in respect of capital borrowed for the purposes of the business or profession.
Interest paid in respect of capital borrowed for acquisition of an asset
for extension of existing business or profession(Words removed by AMENDMENT) (whether capitalized in the books of account or not) for the period
beginning from the date on which capital was borrowed for acquisition of the asset till the date on which such asset was first put to use
shall not be allowed as deduction.
Effect of Amendment
Interest on loan from date of taking loan to date of put to use is not allowed as deduction. (Earlier,this condition was only for extension of existing business or profession, now it is for all assets, whether existing or new)
Recurring subscriptions paid periodically by shareholders, or subscribers in Mutual Benefit Societies which fulfil such conditions as may be prescribed, shall be deemed to be capital borrowed within the meaning of this clause;
Interest subject to Section 43B
If loan is taken from banks or financial institutions,it is subject to Section 43B also
i.e. It should be actually paid till Return filing date,otherwise deduction not available(Refer Section 43B)