If a Proprietorship firm gives/ receives loan during the year to his relatives and the loan is received/ repaid during the same financial year and outstanding amount as on 31st Mar..so is mandatory to provide interest on that repaid amount?Will any of the provisions under Income tax act will be attracted for fine?
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Loan to related parties
Replies (3)
No, but better to keep a document to record this transaction.
no, prov. of intt is not necessary but sec 269ss and 269t should be followed for borrowing and repayment of loans.
Provisions of 269SS and 269T has to kept in mind and check if it is not borrowed money given to relatives. In such cases, Interest shall be disallowed.
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