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Loan to an individual or firm

Tax queries 405 views 2 replies

Hi All,

if someone is a salaried employee with good amount savings every month and from that savings he is giving interest free unsecured loan to his friends/relatives and proprietership firms but parallel to that he is also taking home loan from SBI on interest.  

 

Is this acceptable to Income tax department ? On one hand he is lending his money to someone without interest and on other hand he is raising loan from bank. 

 

Let me know.

 

Regards,

Divya

Replies (2)
yes.... it is acceptable... absolutely no prb....

Even if it is unsecured, loan given should be supported with some sort of documentation, because tomorrow if he receives the repayment of loan, he may prove that it is not his income.


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