Unsecured Loan

Yes but not by cash or bearer cheque...

You can take unsecured loan from your relative in cash upto Rs.20000/- no restriction received by cheque

Hi Shashank,

On parting with an Interest free unsecured loan to relatives amounts to understatement of income and the AO, during the course of assessment proceedings, will add notional amount of interest to the income of assessee. 

tarun is correct