urgent help on Business loan

Tax queries 660 views 2 replies

rajarshi sarkar

manager

50 Points Joined July 2012

Hi,

i recently started a venture real estate development firm, now i have taken a building work order , and in need of some serious finance. so a childhood friend of mine who runs a export business wants to help me out by giving me 45 lacs as interest free and unsecured loan. he will give it to me as an account payee cheque. can i accept that money. what formalities in the perview of Income Tax should be delt with in the first place. i wish to return it in 5 to 6 yrs. the favour is because when he started his business then i had helped with my salary savings. now in 3yrs afterwards he wants to repay me by helping me out with my business concern.

thanks and regards

Replies (2)

ANUP GUPTA

KEEP SMILING fcaanupgupta@gmail.com

303 Points Joined February 2008

1. fIRST OF ALL, YOU NEED TO TAKE LOAN THROUGH A/C PAYEE CHEQUE

2. SECONDLY, TO MAKE THE TRANSACTION MORE ENFORCEABLE YOU MAYENTER INTO A LOAN AGREEMENT BY DRAFTING THE SAME & MENTION CLEARLY IN SUCH LOAN AGREEMENT THAT YOU ARE TAKING A INTEREST FREE LOAN TO AVOID ANY FUTURE PROBLEMS.

3. FOR INCOME TAX PURPOSE ONLY ENTRY THROUGH A/C PAYEE CHEQUE WOULD BE SUFFICIENT TO HELD TRANSACTION LEGAL, BUT IT WOULD BE GOOD IF U ALSO DRAFT A LOAN AGREEMENT.

BEST WISHES FOR YOUR BUSINESS GROWTH & PROSPERITY

rajarshi sarkar

manager

50 Points Joined July 2012

thanks for the speedy reply. the agreement that you mention dose that need to be registered or unregistered? like on a non judicial stamp paper? if so then what value. can you kindly help me out with a sample loan agreement. can i repay the loan amoumt after say three years in parts for say another 5 yrs. so the totalterm of the loan will be around 8 to 10 yrs. and do i need to show this loan in my IT returns. and does the same apply to my friend. i'm bit concerned as i dont want my friend to invite any problem because of me. so its better i know all the formalities and procedures before i accept the help from him.

thanks and regards