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Sir, I want to ask that in ApV calculation loan interest is taxable by which we calculate tax shield but why isn’t the loan repayment taxable?
I.e
6000 loan
10% interest
Repayment let’s say 500600 interest gives tax shield but why not the repayment of 500?
Interest is tax allowable and so saves tax.
The repayment of a loan has no tax effect – this is a tax rule.
(I don’t understand your example at all. Why on earth would anyone lend the company 6,000 and accept a repayment of only 500?)
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