Tax on money borrowed from father

Hello Experts,

I have borrowed Rs. 25 Lacs from my father which he got from his retirement funds. I Have deposited this amount in my Home Loan OD account to save the intrest.

what income tax rules has to say about it and how the taxation would happen.

Thanks in advance

Tanveer

 

 

Replies (16)

You should refer gift provisions of IT Act

Since your father has already paid tax on retirement funds, the same cannot be taxed again in your hands. @ bhargav: gift provisions are not applicable for loans

do not show it as Borrowed Money/ Loan....MAKE A GIFT DEED AND SHOW THIS AMOUNT AS A GIFT FROM YOUR FATHER...ANY SUM OF MONEY RECEIVED AS A GIFT FROM RELATIVE SHALL BE EXEMPT

May be clubbing provision will attract
No tax involved. Show it as gift and it's exempt
No application of clubbing provision,as he is not a minor.how you know tax is already paid by father on his retirement fund..
Pls treat this money as a gift
1.) since it is a genuine loan no tax provision attracted for acceptance of loans. (2.) interest saved might attract clubbing provision but since leader is father, clubbing will not be attracted. (3.)however you to see the compliance of sec 269ss
Treat it as GIFT... Gift from relatives is exempt from income tax. Defination of relative includes linear ascendent or descendent .

If it was not a retired funds as mentioned in original query,

how will be the consequences?

And if the funds are already tax paid income how it will be treat

with out mention as a gift fund.

@ Purnima Ji.

I was suggested to take such amount as gift from his father & then he can pay it for their outstanding loans. 

I guess I was failed to communicate my point. As retirement income are already tax paid so no worry & also you can take it as loan then same has to be piad for outstading loans. At the end it will nothing but book adjustments.

 

thanx.

 

Make gift deed as in blood relationship it is exempt
Treat this as a gift and the same shall be exempt from tax

Hi All

BORROWAL cannot be treated as GIFT..only the amount gifted through a registered gift deed is gift...since the amount is deposited in home loan account, you can treat it as repayment of int and principal as per HL repayment sch...

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
26 September 2026
Chartered Accountant

pushpganga ventures

Pune

CA

View Details
Company
14 October 2026
GST & TDS ASSISTANT

AGGARWAL SANJAY & ASSOCIATES

New Delhi

B.Com

View Details
Company
14 October 2026
Asst. Manager/Dy Manager (Costing)

manufacturing

Pune

CMA

View Details
Company
ARTICLESHIP 17 October 2026
Articled Assistant

RRPM & Associates LLP

Chennai

CA Inter

View Details
Company
ARTICLESHIP 22 October 2026
Articleship intern

Srinath Manikanta

Hyderabad

CA Inter

View Details
Company
Featured ARTICLESHIP 06 October 2026
Semi Qualified

AJAY SINGH AND CO LLP

Thane

CA Final

View Details
Company
ARTICLESHIP 08 October 2026
ARTICLE TRAINEE

S.B.G. & CO. CHARTERED ACCOUNTANTS

New Delhi

CA Inter

View Details
Company
ARTICLESHIP 07 October 2026
Article Assistant

Malhotra Rajesh & Associates

New Delhi

B.Com

View Details