Loan from wife / close relatives

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 July 2012 Is it compulsory to pay interest on loan received from wife?

Is it compulsory to prepare loan agreement when loan is taken from near relative i.e. sister-in-law, sister?

Also whether interest payment to near relative is compulsory? What is the solution if no interest is paid during last year and even there was no formal loan agreement?

Thanks in advance

CA BIREN SHAH

CA BIREN SHAH (Expert)
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25 July 2012 Payment of interest is not compulsory...

Message likes : 1 times

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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05 August 2012 It is applicable only to the extant of the capital of your wife or relatives. If they have taken loan and given you loan then you have to pay interest or otherwise whatever interest is paid by your wife or relatives on the loan taken shall be disallowed in their hands.

It is not necessary to provide interest otherwise except in the circumstances stated above

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