CA CS Amit Borade (Chief Accountant) (2828 Points)
17 June 2010Hi Friends
Interest free loan taken from friend for Rs.15, 00,000/-. This loan amount is used for trading & income earned from such loan amount is Rs.1,00,000/- ..
Is the interest free loan amount is taxable as Gift under the head “Income from Other Sources”
Amir
(Learner)
(4016 Points)
Replied 17 June 2010
HI Amit,
After a long time.......:)
IF YOU CAN PROVE THAT THE TRANSACTION IS INTHE NATURE OF "LOAN" & NOT "GIFT" THEN IT CANNOT BE ADDED TO THE INCOME.
Ways to prove -
1) Loan Agreement
2) Balance Sheets of Borrower as well as Lender.
3) Repayment in full or in part, will help you in proving that the transaction is of "Loan" (in the absence of above)
CA CS Amit Borade
(Chief Accountant)
(2828 Points)
Replied 17 June 2010
Thanks for the Valuable information Amir.
CAclubindia
