Skip to content

CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Tax Planning and Business Restructuring

Under section 32(b)(ii) of the Income-tax Act, 2025, recurring subscriptions paid periodically by shareholders or subscribers in Mutual Benefit Societies, meeting prescribed conditions, are treated how?

Recurring subscriptions paid periodically by shareholders or subscribers in Mutual Benefit Societies that satisfy the prescribed conditions are deemed to be capital borrowed under section 32(b)(ii). This lets interest paid on them qualify under the business interest deduction.

  1. AAs share capital that earns no deduction
  2. BAs deemed capital borrowed for the interest deduction provisionCorrect
  3. CAs exempt income of the society
  4. DAs capital expenditure of the society

Explanation

Section 32(b)(ii) deems such recurring subscriptions, where the prescribed conditions are met, to be capital borrowed. Interest paid on them can therefore be considered under the business interest deduction. The other options are not stated in the provision.

Did you get it right without looking?

One question tells you little. A timed set on Tax Planning and Business Restructuring shows your real accuracy, how long you take and where you lose marks.

Practise Tax Planning and Business RestructuringFree diagnostic mock

More Tax Planning and Business Restructuring questions