Showing source of income

I would like to know

1.whether the loan given by NRI Cousin to start a business is non-Taxable?.

2.Whether gift received amounting 10 lakh cash from relative taxable-same being used to start a business?.

My query is whether the above two can be shown as source of income to start a business?..

 

Replies (5)

Cousin is not a relative for availing gift tax exemption. So the amount received from an NRI cousin will be taxable.

Originally posted by : Mihir

Cousin is not a relative for availing gift tax exemption. So the amount received from an NRI cousin will be taxable.

Agree.

Answer for Second Question

Gifts received from specified relatives are exempt from Income Tax and there is no upper limit also but While receiving a gift, its always in the interest of the donee (i.e., the recipient) to get a gift deed signed by the donor. This can always help support the case that the item was indeed a gift and can be used as evidence in case of future litigation/investigation by the Income tax department

agreed with experts

Dear Mihir

If He is providing the money, say 10 lakh rupees as Personal loan, Can it be shown as source and thereby not applicable for taxation?..

The person receiving money will also pay interest to NRI cousin.

If the loan is received supported by a legal document or a promissory note stating the terms and conditions of interest and/or repayment and is legally binding, such loan will be non-taxable in the hands of the recepient.

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