Loan from friends or family member
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
08 August 2012
Hello Experts,
if we(as a P firm or proprietary concern) accept loan of Rs 100,000/- from friend or relative in cash can we claim its interest as expenses or not? or it is mandatory to accept loan in banking rout cheque etc.
Thanks.
if we(as a P firm or proprietary concern) accept loan of Rs 100,000/- from friend or relative in cash can we claim its interest as expenses or not? or it is mandatory to accept loan in banking rout cheque etc.
Thanks.
10 August 2012
Firstly Section 269SS of the Income Tax Act prohibits accepting loans in cash in excess of Rs. 20,000.
If you accept loan amounting to Rs. 1 lakh in cash, penalty equal to Rs. 1 lakh shall be levied on you.
Interest paid on such loan shall be allowed as deduction subject to the provisions of Section 40A(2).
If you accept loan amounting to Rs. 1 lakh in cash, penalty equal to Rs. 1 lakh shall be levied on you.
Interest paid on such loan shall be allowed as deduction subject to the provisions of Section 40A(2).
Querist : Anonymous
Querist :
Anonymous
(Querist)
10 August 2012
Thanks sir
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