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Should debt be shown in it return

Jaikiran (Finance Professional) (133 Points)

29 July 2011

if a person takes debt of say 40 Lakhs from his brother throug DD to pay to his mortgaged loan account, should that be shown in the IT return, if so as what?

Thanks in advance

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5 Replies

Mihir (Wealth Manager) (5293 Points)
Replied 29 July 2011

You don't have to show, since you have taken a loan from your brother. It is not your income.

rakeshkuma (B.COM CA FINAL) (43 Points)
Replied 29 July 2011

if he has not owned business/ profission covered u/s 44ab , then same need not to disclose.

valji (Accounts manager-MBA) (2150 Points)
Replied 29 July 2011

agree with above

Jaikiran (Finance Professional) (133 Points)
Replied 29 July 2011

Thanks for the replies, if you have time, i want to elaborate the case much longer and clearer could you even plz help me out there.

My mother got a house property as gift from her father many years ago. in recent past she had mortaged that property to a bank by being as a guarantor to a loan taken by one her known person. That person failed to repay the loan and as a result my mother has to do that. In this process to bring her property back from aution she took that payable amount from her brother at some interest and got the property demortgaged. Now to clear this debt and some other debts she has to sell that property.

Now if you have time, i have few questions on this case,

i) If she sells up the property, I hope since it is a gift for her, the sale amount as a whole will be the capital gain amt and she is supposed to pay income tax @ 20% of the total sale amt. Is this correct?

ii)If she gets back the amount whatever paid for the bank on behalf of other, will that be again treated as her income or the debt what she made can be adjusted for it?

iii)If can be adjusted, then should she show that debt now in her return?

iv)Her brother got that money whatever adjusted through his salary savings and by closing few life insurance policies and some more amount by again taking debt from his friends which all landed in his account.
Now as total credits in his account crossed 10 lakhs, should he have to show all that in his return?

Kindly assist.