Interest free loan to daughter or son
This query is : Resolved
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Anoop Agarwal
(Querist)
08 June 2026
Dear Members,
I am a salaried person 50 years of age. I want to give loan to my major daughter and son without charging any interest, The term of repayment will be 'on Demand'. Can I do it without attracting income tax authority concerns.
What I need to do for the same. I will transfer the money through banking channels (Net Banking). Any deed i shall make? if yes how much amount of stamp paper to be used for the same and any format. Is there any concern to me if they invest and earn money out of that money like clubbing etc.
I am a salaried person 50 years of age. I want to give loan to my major daughter and son without charging any interest, The term of repayment will be 'on Demand'. Can I do it without attracting income tax authority concerns.
What I need to do for the same. I will transfer the money through banking channels (Net Banking). Any deed i shall make? if yes how much amount of stamp paper to be used for the same and any format. Is there any concern to me if they invest and earn money out of that money like clubbing etc.
08 June 2026
Legality: Giving an interest-free loan to major children via online banking is perfectly legal and does not attract direct tax.
Clubbing of Income: Does not apply because the children are adults. Any investment income earned from this money will be taxed in the children's individual files.
Documentation: Execute an "On-Demand" Loan Agreement on a nominal stamp paper (₹100 to ₹500 depending on the state) to maintain a clear audit trail for the Income Tax Department.
Clubbing of Income: Does not apply because the children are adults. Any investment income earned from this money will be taxed in the children's individual files.
Documentation: Execute an "On-Demand" Loan Agreement on a nominal stamp paper (₹100 to ₹500 depending on the state) to maintain a clear audit trail for the Income Tax Department.
Anoop Agarwal
(Querist)
11 June 2026
Thank you Sir for your response.
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