Hi
I am a salaried individual paying tax. Can I give a loan to my spouse for buying a commercial property ? Can I charge interest for the loan and if so how to show the loan and interest in my return ?
Thanks in advance
cds
9 Replies
Vishal Goel
(Chartered Accountant)
(1693 Points)
Replied 02 May 2015
You can give interest free loan to your wife for buying commercial property. In this situation interest not arise then no taxation issue.
Can I charge interest for the loan : Yes, you can charge interest, but this will be taxable in your hand,
CS Advocate Abhishek Goyal
(M Com FCS LLB M-AIMA )
(13949 Points)
Replied 02 May 2015
If you charge interest you have to show interest income under income from other sources.
Sonakshi Mangla
(Employee)
(310 Points)
Replied 02 May 2015
agree with the views expressed above.. y to unnecessarily charge interest & offer it for tax..
i.k.patel
(tax consultant)
(43 Points)
Replied 03 May 2015
You can give loan to your wife and charge interest on it, but you have to add interest in your total income and tax may be payable.
vsraj
(administration)
(136 Points)
Replied 03 May 2015
Whether it is with interest or without interest - Is it not that there has to be cosideration for the loan availed, according to latest IT provisions. Can somebody clarify
vsraj
CA PARAS BAFNA
(Practising CA )
(33428 Points)
Replied 03 May 2015
In case of loans given to the close relatives the only thing which is keenly observed by the IT officers is , whether the amount has been availed out of the borrowed interest bearing funds or own funds.
.
In case the husband avails his money to his wife in the form of interest free loan the department can not ask about the consideration.(Humour-specially when the AO is a married guy)
.
(In practical also wife has more exectuive powers on the income earned by the husband
vsraj
(administration)
(136 Points)
Replied 03 May 2015
Thank you Mr.Paras Bafna for your prompt reply. When I give a loan to my spouse, should I do it by way of
Promissory note in a stamp paper or
a simple document in a paper or
the cheque I deposit in my spouse,s account can be considered as a valid document in this regard.
Thank you in advance
vsraj
i.k.patel
(tax consultant)
(43 Points)
Replied 03 May 2015
Depositing cheque in bank is sufficient, no other document is required
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