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Ankit (none)     04 February 2011

Lending Money to a Friend

Hi,

I have to lend more than Rs. 10L to my friend. I want clear documents so that there is no tax/legal problems later. What paper work is required? and What details should be included in the document?

If I get any interest, what will be the tax liability? 


Many many Thanks

 



Learning

 6 Replies

DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE )     04 February 2011

Legally it will be defficult to recover.

ansari salman (mumbai)     04 February 2011

(Legally it will be defficult to recover) i agree with mr, shashikumar  sir

Ankit (none)     04 February 2011

I agree risk of default is there. But in case I have a document on stamp paper to make sure I lent him the money would reduce the risk.

What is the tax liability on such lending?

ADV Rajesh KASRIJA (ADVOCATE)     05 February 2011

r sir

R U LEND MONEY OR YET TO BE LEND? IF NOT LEND YET,THEN LEND THROUGH CHEQUE, & AS SECURTY U RETAIN POST DATED CHEQUE.

M.S.Bhalerao (advocate)     05 February 2011

Mr. Ankit,

You want to lend.  As per income tax provisions any transction above Rs. 20,000/- has to be by cheque and not in cash.

you have to obtain  a Deman Promisory note if you want the amount to be returned to you on when you make a demand within 3 years. if the period is longer then you have to enter into a term loan agreement mentiong proer conditions of contractual obligations. you are wlcome

JASHVANTLAL NARANDAS MADALANI (Execuitive Director)     17 March 2011

Mr.Ankit,

      considering Incomtax law. you must obtain cheques each of Rs 25000/ from him so as to secure your lending. letteron you can deposit the same to recover your amount. further  obtain promisery notes each of Rs 25000

 

 

JN Madalani


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