Loan to major son (student) for starting business

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This query is : Resolved

VK Iyer (Querist)

11 February 2016 Sir(s), I and my wife wish to give interest free loan to our son (21 years, student) for starting share trading business. Total amount we wish to loan him is around 5 lakh. For the purpose of Income Tax and other tax implications what are the steps we should take. I am a govt pensioner (Rs.2.50,000 annum) and my wife is a government employee (7,00,000 annum). Is it necessary for my son to file tax return if his income is less than 2,50,000. Is it necessary for us to show this in our Income tax return? Kindly advice.

Viswakumar

RAJESH KUMAR KHANDELWAL

RAJESH KUMAR KHANDELWAL (Expert)

11 February 2016 You can give loan to your son by any mode other than cash. In my view your son should file ITR if he is doing share trading business. It is not necessary to show loan advance in your return of income related to salary.

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)

11 February 2016 You need not show in your return as you are declaring salary or pension income, loan given and taken will reflects in balance sheet , your son file itr-4. In balance sheet he can show loan.
But advised to give money in cheque or online transfer.

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