Given 1.5 lacs as interest free loan to Friend in FY 2023-24 but forgot to disclose the same in ITR

I had given 1.5 lacs as interest free loan to a friend in his bank account (as he was purchasing a land) in Dec'22....but I forgot to disclose the same in ITR-2 (as my income is above 50 lacs).

He had returned money back to me in July'23 in below form:

1. He purchased a mobile for me worth 50 thousands

2. He made a payment of 1 lacs to someone on my behalf

My question is that Since I had not disclosed this interest free loan given to my friend in my ITR. Will there be any issue in future?

Replies (1)

Not disclosing an interest-free loan given to a friend in your Income Tax Return (ITR) may not necessarily lead to issues in the future, but it's essential to consider the following: 1. _Tax implications_: Interest-free loans are not taxable income, but if the loan is significant, it may raise questions about your income and expenses. 2. _Loan documentation_: Keep records of the loan agreement, including the loan amount, interest rate (0% in this case), repayment terms, and any other relevant details. 3. _Gift tax implications_: If the loan is forgiven or not repaid, it may be considered a gift and subject to gift tax. 4. _ITR scrutiny_: If your ITR is selected for scrutiny, the loan may be questioned, and you'll need to provide documentation. 5. _Relationship and trust_: Not disclosing the loan may damage your relationship with your friend if they discover it. To avoid potential issues: 1. _Disclose the loan_: Consider disclosing the loan in your next ITR or file a revised return. 2. _Maintain documentation_: Keep accurate records of the loan and repayment. 3. _Seek professional advice_: Consult a tax professional or financial advisor for guidance. Remember, honesty and transparency are crucial in tax matters. If you're unsure about disclosing the loan, consult a tax professional for advice.

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