Income Calculation

This query is : Open

Mohith Guptha (Querist)
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14 December 2020 Dear Sir/Madam,

Would like to how the income is calculated on the following and how the entries are to be passed in books of accounts for computation and P&L, following is the scenario:

If a mortgage loan is taken on an individual property and the money got from loan is transferred to other person and interest is taken from him at 6% flat annually, where as the loan on mortgage is at 8% diminishing annually, whereas the interest paid to bank annually almost 10,50,000 where interest received is Rs. 6,75,000/-, how do we account the same as the interest received is shown in 26AS and TDS is remitted by the borrower. require clarity that i need to deduct the difference of Rs. 375000/- in interest excess paid to bank from my actual income by adding this Rs. 675000/- or i cannot take exemption on the interest paid amount and received amount and need to pay full tax on Rs. 675000 which i received as income. Please clarify and how do i book the same in my accounts.

Thanks in advance.

Regards
Mohith