Loan to his friends

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Tax Consultant
136 Points Posted on 04 October 2020
What is the maximum amount a person can pay as a loan(tax-free for both) to his friend under the Income Tax Act?Note: All amounts are transfer through bank channels.
Thanks in advance!
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On 04 October 2020 at 20:01 Report
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Quick Summary
This discussion explores the tax implications of lending money to friends in the UK. While there's no strict limit on the total amount you can lend, the key is how you structure it. If you lend from your own funds without charging interest, the amount should be reasonable relative to your income. However, if you do charge interest, that interest income will be taxable.

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Tax consultant
5895 Points Posted on 04 October 2020
The amount should not exceed the sum of 50000
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On 04 October 2020 at 23:12
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Tax and Business Consultant
11616 Points Posted on 05 October 2020

There is no limit on Loans to be Given...
But yes, you have to charge interest from your friends and that will be considered as your income...

If you are giving Loan to friends from you own fund (Not from loan taken by you from others) than you can also give them without charging interest (i.e free of cost) but Amount of should be reasonable as per your income and transaction.

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On 05 October 2020 at 00:03

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