Chargeability
This query is : Resolved
CA JAYESH RELKAR
(Querist)
03 March 2013
IF I GIVE LOAN TO MY FRIEND/RELATIVE OUT OF MY BUSINESS/PROFESSION, @ 2%p.a. AND MARKET RATE OF INTEREST IS 10%, WILL 8% INTEREST WILL BE DEEMED AS MY INCOME ON NOTIONAL BASIS.
WHAT WOULD BE THE POSITION IF I GIVE INTEREST FREE LOAN AND MARKET RATE IS 12%
WHAT WOULD BE THE POSITION IF I GIVE INTEREST FREE LOAN AND MARKET RATE IS 12%
CA PARAS BAFNA
(Expert)
03 March 2013
If you have obtained borrowed funds and paying interest to the lenders, then the criteria which you raised above would apply.
.
However, where the amount lent by you is out of your own money or capital, Income Tax Act
does not deny you to maintain the friendship
or relationship. You may extend loan at a rate of your choice.
.
.
However, where the amount lent by you is out of your own money or capital, Income Tax Act
does not deny you to maintain the friendship
or relationship. You may extend loan at a rate of your choice.
.
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