LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Taxability of loan to brother

21 November 2019

Have given a loan to brother. He pays interest @ 12% p.a. every month. Can I claim exemption u/s 56 as a gift in my hands from a brother? Or If I have to pay tax " as income from other sources"?
👍

Reply
Follow
Share

5 Replies

girishpawar pawar (7 Points)
Replied 21 November 2019

If he is your own brother then u n him become relative and he can give u any sum of money as a gift

RAJA P M ("Do the Right Thing...!!!") (127140 Points)
Replied 21 November 2019

@ PRASHANT KAPRE.,

You deal the amount as loan and received interest... right...?!

But, You ask the Interest can be treated as gift...

How is it possible Dear...?

Your question is very well... Also the answer from Your side...
Think that view...

@ Mr Pawar.,

Which based reply by You dear...?

Is reply based on only one side...?

1 Like

Kapadia Pravin (17249 Points)
Replied 21 November 2019

It is strange situation.

Your brother has to take finance on loan but he has money to give a gift !!!!

It would be better that you give a gift to your brother (instead of a loan) and as and when you require, your brother will give a gift to you.

CS M Pota (Company Secreatary) (3180 Points)
Replied 07 December 2019

To write to clear you shold have given as loan to your brother and your brother will repay the loan when he pays back.So far as interest concerned you should should show 12% as income from other source or you may give interest free loan but show notional intere as income from other source.

CA Dinesh Kalyani (CA) (51 Points)
Replied 10 December 2019

Interest paid by your brother to you, cannot be treated as gift, because it is interest paid by him. One transaction can have only one nature, either treat the transaction as payment of interest, or treat the same as a gift.