Loan
This query is : Resolved
B.P. SRIDHAR
(Querist)
02 February 2013
sir,
An Assessee took a loan from a Bank through his bank account for the construction of house of his Mother who is not an I.T. Assessee. out of the loan amount he gave half of the loan amount through a cheque to his mother and used the remaining amount for his own business.Can that(Amount given to mother) be shown as gift to mother? what would be the effect. how to write in Assessee's a/cs. Pl Clarify.
An Assessee took a loan from a Bank through his bank account for the construction of house of his Mother who is not an I.T. Assessee. out of the loan amount he gave half of the loan amount through a cheque to his mother and used the remaining amount for his own business.Can that(Amount given to mother) be shown as gift to mother? what would be the effect. how to write in Assessee's a/cs. Pl Clarify.
CA PARAS BAFNA
(Expert)
02 February 2013
Genuine gifts are made out of own money.
.
A business man , who gifts certain amount
out of borrowed funds...... does it sound good for a prudent business man ?
.
Still, if he want to extend support to his mother, he should bear the interest costs himself in his personal capacity ,and may extend interest free loan to his mother.
.
.
A business man , who gifts certain amount
out of borrowed funds...... does it sound good for a prudent business man ?
.
Still, if he want to extend support to his mother, he should bear the interest costs himself in his personal capacity ,and may extend interest free loan to his mother.
.
Message likes :
1 times
CA. RAGHAV GARG
(Expert)
03 February 2013
Truly in support with CA Paras Bafna Ji,
but as far as Income Tax Deptt. is concerned, they will not let the assesse take advantage of Interest and will disallow the Interest considered as expense from the p&l on the amount forwarded Interest Free or will consider a deemed Interest in the hands of assesse.
However, it is suggested to treat it such as Gift as the Money advanced to mother are not stamped with the Loan from Bank on it.
The Loan is Housing Loan, and only the Amount brought in the books are to be considered as Addition in capital in the books of Business.
help can contact at raghav@ggassociates.in
but as far as Income Tax Deptt. is concerned, they will not let the assesse take advantage of Interest and will disallow the Interest considered as expense from the p&l on the amount forwarded Interest Free or will consider a deemed Interest in the hands of assesse.
However, it is suggested to treat it such as Gift as the Money advanced to mother are not stamped with the Loan from Bank on it.
The Loan is Housing Loan, and only the Amount brought in the books are to be considered as Addition in capital in the books of Business.
help can contact at raghav@ggassociates.in
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Depreciation Chart Companies Act
- GST Audit whether Govt Companies are exempt?
- PTRC Show Cause Notice on Email
- Accounting treatment of AMC alongwith the purchase of Laptop
- Unable to File TDS Q2 Return – New TRACES Portal Error
- Capital Gail Exemption Certificate
- Taxation of crypto futures in India Fy 2026- 2027
- EPF ECR NEW RULES Sep 17th 2026
- Not ordinarily resident having partnership income in India and salary in USA is any form to filed be
- Issuing of delivery challan by seller of goods
- GST Treatment of Purchases with GST Paid where Outward Supplies of Manufactured CattleFeed Exempt
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
