Trading using personal loan money

This query is : Resolved

sumit kumar (Querist)
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12 May 2013 dear sir,

i am sumit from bangalore.

i have 2 queries as follows:

1. can i use money obtained from personal loan to trade in commodity futures? is it legal as per indian regulatory and tax laws.
2. i am a salaried person. my wife is house wife, can i take personal loan in my name at 16 percent interest rate and give this money to my wife at 16 percent interest rate and she use this money to trade in commodity futures. if this is legal as per indian regulatory and tax laws. is the tax on profit earned by my wife in above case will be paid by my wife or by me?

please help me in clearing my doubts.

thanks in advance

Guest

Guest (Expert)

12 May 2013 There is no problem in 1 case, you can utilize your personal loan amount in trading.

In 2nd Case:-
The interest earned from providing loan to your wife is income and interest paid on personal loan is allowed as expenditure u/s 57.

But before this please make sure provisions of Section 269 SS are satisfied.