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Unsecured loans
is it possible to perform works contract against unsecured loan taken from party or is this against the provisions of income tax act
Replies (15)
Transfer loans to advances received.
but the same has been reported in 3
But the same is reported in 3cd as unsecured loan last year
Doesn't matter. It was reported in previous year. Your treatment of loan will change in current year.
How do you obtained the unsecured loan? through bank or cash.
Unsecured loans are from friends or relatives. No financial institution will lend unsecured loan.
As o'er income tax Act, no loan of <=20000 can be given in cash. Less than that from one person is allowed.
greater than or equal to 20000 is not allowed in cash.
It means money transaction happened through cash or bank?
Yes but within prescribed limit for the whole year.
In that case, you convert the same into advance but if required, you need to substantiate the same to AO.
Of course. However it is unlikely that officer will object to this treatment of accounting to the entry but yes, you should have reason and/or evidences for change in the treatment.
Loan was through bank but the party was going abroad and the firm was not having enough funds so it asked the firm to perform work contract in lieu of loan
The loan was through bank but the party is now leaving India wanting the firm to perform a work contract for it in lieu of the unsecured loan it had taken
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