Can relative give interest free loans?
Querist : Anonymous
Wish to know that:
Whether a relative can give interest free loan to the proprietorship concern of relative????
Please explain with Income Tax Act & TDS Matters in relation to it also.
Thanks
account payee cheque / demand draft.
Since there is no interest, TDS provisions does not apply.
Querist : Anonymous
I asked something else and you replies else.
Please go through again my question.
I asked about Interest free loan
Mr. Chackrapaniji said about your query,
1. yes means, yes relative can give interest free loan to proprietorship firm
2. if interest in not going to pay then there is no tds rules effect
3. its the bonus...additional reply
if you take interest free loan you have to take care of amount you are going to receive morethan Rs. 20,000/- you must need to take a/c payee cheque from relative to avoid disallow sec.
The reply is Yes the relatives can give interest free loans up to the extant of their capital and free reserves and that too by cheque if it exceeds 20,000 or more.
Querist : Anonymous
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