What is the maximum amount a person can pay as a loan(tax-free for both) to his friend under the Income Tax Act?Note: All amounts are transfer through bank channels.
Thanks in advance!
2 Replies
ayusmita
(Tax consultant)
(5885 Points)
Replied 04 October 2020
The amount should not exceed the sum of 50000
Sagar Patel
(Tax and Business Consultant)
(11611 Points)
Replied 05 October 2020
There is no limit on Loans to be Given...
But yes, you have to charge interest from your friends and that will be considered as your income...
If you are giving Loan to friends from you own fund (Not from loan taken by you from others) than you can also give them without charging interest (i.e free of cost) but Amount of should be reasonable as per your income and transaction.
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