Education loan to a distant relative

One of my relative (nephew from my wife side) is selected for admission in NIIT. He requested me for a loan of ₹5 Lac to cover expenses for his education. I would like to help him in his studies, but am not interested in I.Tax related complication. Please advise me how to go about it.

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R.Ramachandran (Advocate) 15 June 2018

No complications. You can give him a loan without interest. It is not clear whether you intend to recover the money from him at any later point of time. If so, then you have to get a proper legally sustainable promissory note. I hope your nephew is above 18 years of age and a major.