Hand Loan from Father

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

07 January 2011 I want to part pay the housing loan, for which I am planning to take hand loan (interest free loan) of Rs. 5 Lacs from my father. I wish to know following:

1. Does Income Tax Law/ Gift Tax Law allow me to take such hand loan from my father.

2. What would be the tax liability for me or my father.

3. What kind of documentation is needed to record such a transaction.

CA Sanat Pyne

CA Sanat Pyne (Expert)
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07 January 2011 In my opinion, show the transaction as gift .any amount of gift received from relative is not taxable,provided that amount should have definite source.