Loan from mother waived
This query is : Open
CA Shyam Agarwal
(Querist)
27 August 2016
Respectable Experts
A Proprietorship business has unsecured loan(liabilities) of Rs 225000/- from his mother. Mother passed away three year before but loan is still outstanding.
Can we transfer this loan to directly his capital a/c and without adding in his income without giving any tax in this amount.
As per my opinion we can treat this Item as gift or if we not consider this item as gift then we can treat that he received this amount as inheritance.
In both case income is not taxable
Please comment
A Proprietorship business has unsecured loan(liabilities) of Rs 225000/- from his mother. Mother passed away three year before but loan is still outstanding.
Can we transfer this loan to directly his capital a/c and without adding in his income without giving any tax in this amount.
As per my opinion we can treat this Item as gift or if we not consider this item as gift then we can treat that he received this amount as inheritance.
In both case income is not taxable
Please comment
ACA Anurag
(Expert)
28 August 2016
Dear Shyam,
In My view if should be directly added to capital account and no tax is needed to be paid on that.
Hope your query is resolved
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