Interest Income

This query is : Resolved

Amit Kumar Agarwal (Querist)
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08 December 2009 In income tax using money of friends and relatives in business as unsecured loans and paying interest on same is a common way of tax planning. However, in every state there is a law for regulation of money lending (like Uttar Pradesh regulation of money lending Act operational in state of U.P.), which requires a person to get himself registered before starting a moneylending business. My query is whether such lending by friends and relatives also require registeration under such Acts and if not then how such exemption from registeration has to be claimed.

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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08 December 2009 Loans taken from close relatives are out of purview of these Acts.

Hence one can take loans from close relatives.

In close relatives; friends are not included.

CA Rakhecha
Surat