Loan to Father for business purpose

Tax planning 264 views 1 replies

Hello Friends,

I have borrowed loan from my bank and lended it to my Father for business purpose. Bank will charge interest to me and reciprocally I will collect it from my father. My father will deposit installment (principal + interest) amount in my account to settle the loan.

In this scenario, what will be income tax implication (if any) and can my father claim interest payment as business expense.

Replies (1)
Yes if your father proves amount is used for business purpose he can claim expenditure of interest on loan


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