Loan from a friend for business
This query is : Resolved
12 September 2013
Hello,
I am borrowing an amount of Rs. 1Lac from my friend as loan for my business(its a proprietorship firm).
I want to know:
1.By what it is beneficial for lender and borrower to pay the money(Cheque/Cash).
2.If I borrow in cheque, will I have to pay taxes on it.(I am going to use it as working capital).
Thanks in advance
I am borrowing an amount of Rs. 1Lac from my friend as loan for my business(its a proprietorship firm).
I want to know:
1.By what it is beneficial for lender and borrower to pay the money(Cheque/Cash).
2.If I borrow in cheque, will I have to pay taxes on it.(I am going to use it as working capital).
Thanks in advance
12 September 2013
Hi Hardik.
It would be advisable to borrow via a/c payee cheque. You may also consider signing a loan agreement to evidence the receipt of money as loan.
Since the said amount shall be in form of loan, there won't be any tax on the receipt of the same.
However, if you pay any interest on the said loan, the same shall be added to your friend's income.
If you need any further information/ assistance, please let me know.
Regards
Nikhil
It would be advisable to borrow via a/c payee cheque. You may also consider signing a loan agreement to evidence the receipt of money as loan.
Since the said amount shall be in form of loan, there won't be any tax on the receipt of the same.
However, if you pay any interest on the said loan, the same shall be added to your friend's income.
If you need any further information/ assistance, please let me know.
Regards
Nikhil
Message likes :
1 times
04 August 2016
Thanks sir!
I did what you mentioned and have repaid the loan :) Sorry for rating late.
Thanks again.
I did what you mentioned and have repaid the loan :) Sorry for rating late.
Thanks again.
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