tax audit.

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 August 2010 sir my query is regarding section 40(A)2:
Assessee is a lady (Prop. Firm). Unsecured loans arnd 12-15. Taken loan from both sons, their wives, and inlaws of 1 son. Will all these persons come in definition of relative under 40(A)2 for disclosing interest paid to them.
Also rent is paid to both daughter in laws for godown.

Pls clarify my problem with complete definition of relative for INDIVIDUAL for this SECTION.
Thanks

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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30 August 2010 Amounts not deductible in respect of payment to Relatives [Sec. 40A(2)]

As per the provisions of this section any payment made by an assessee to any of his ‘Relatives’ in respect of any expenditure is disallowable to the extent it is considered excessive, or unreasonable, having regard to the market value of Goods or Services or Facilities etc.

‘Relative’ is defined to include Husband, Wife, Brother, Sister or any other Lineal Ascendant or Descendant;

For Detailed Definition of Relative please check below article---

https://www.caclubindia.com/articles/relatives-under-the-income-tax-act-a-relative-concept-963.asp

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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30 August 2010 Relative for the purpose of section 40A(2) is spouse, brother,sister ,any lineal ascendant or descendant of the individual.

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mohinder kansal

mohinder kansal (Expert)
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30 August 2010 in this case sons wives and in-laws are not relatives

Aditya Maheshwari

Aditya Maheshwari (Expert)
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31 August 2010 Section 2(41) “relative”, in relation to an individual, means the husband, wife, brother or sister or any lineal ascendant or descendant of that individual ;