An individual person Started a proprietorship business & required some Fund. Can he take loan from his wife ?
14 Replies
CA Anand Oberoi
(Chartered Accountant)
(296 Points)
Replied 29 December 2009
yes, he can take loan and it will be an unsecured loan in nature generally. but if such money of wife is niether earned by her nor her part of dowry and it was given as a gift by her husband in past, then interest paid on such loan will be clubbed in husband's income.
Amir
(Learner)
(4016 Points)
Replied 29 December 2009
Loan from Wife can be taken..Interest will be allowed as deduction, But Rate of Interest should be as per market rate otherwise AO can challenge Rate of Interest as unjustifiable u/s 40A(2) and disallow the excessive interest....
NARENDER PAWAR
(CA final Student)
(337 Points)
Replied 29 December 2009
YES LOAN CAN BE TAKEN FROM WIFE, IF ANY INTT. PAID BY THE HUSBAND TO WIFE IT SHALL BE CLUBBED IN THE INCOME OF THE HUSBAND
CA Amit Joshi
(CA)
(1141 Points)
Replied 29 December 2009
Lone can be taken from wife and intt is allowed on it,
the only point is u have to prove that the amount of lone is earned by ur wife in past and u r not gifted this amt to her in past.............
Manish Makhecha
(Article assistant)
(79 Points)
Replied 29 December 2009
Yes loan can be taken from wife and if any interest is paid by her husbant to wife then such interest shall be clubbed in the hands of husband and i m agree with Mr. Narender
Reetika Goel
(Qualified Chartered Accountant)
(565 Points)
Replied 29 December 2009
Business and business man are considered as separate entity. So, if Mr. X takes loan from Mrs. Z in his business then it shall be allowed provided Mrs. Z had sufficient own source for such payment.
If she gives loan from her husband's money just to cheat others (revenue) then it shall be considered as Mr. Z's own fund and any interest on this shall be clubbed in his income.
C.Balaji
(Learner)
(1867 Points)
Replied 01 January 2010
completely agree with Reetika..........Mrs.Z has to prove that she has sufficient fund (own source) for providing such loan .......Interest will be allowed but it should not be overrated.....
RAJ
(CA)
(120 Points)
Replied 04 January 2010
In short I can summarise that, in normal circumstances. Interest @ 5-8 % p.a. can be allowed as deduction by A.O., but don't forget to disclose this income in returns of wife
CA Anand Oberoi
(Chartered Accountant)
(296 Points)
Replied 04 January 2010
but everyone should also note that source of funds to wife should also be disclsed. either she has been filing the ITR and has created her capital from where she has given the present loan or she has accumulated the dowery (or pin money). only then we can claim payment of interest as per market rates. otherwise, it will be disallowed.
However, we can take interest free loan from wife at anytime. :)
Mohana Harish
(AUDIT TEAM LEAD - CA FINAL)
(468 Points)
Replied 08 January 2010
Yes he can take a loan from his Wife but it is subject to TDS if TDS is deducted from the Interest Payment then it is allowed as business expenses or vise versa.
Deep Chandan
(Trainee)
(21 Points)
Replied 25 May 2011
Whether Husband can give loan to wife at concessional rate or without interest ?
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