Dear experts can a person give loan of rs.one lakh in cash if that person failed to repay the loan amount that person can file a suit in the court of law. is there any objection as the loan is given in cash as per the income tax act . some body saying that loan rupees more than 20000 must give only through bank kindly advice on this thanq in advance
The profession and reasons for obtaining a loan and how it was utilized is also material as that IT clause is also having exemptions. The lender may have violated an IT clause and may be held responsible for such violation under IT Act, but a borrower can not play the game and evade such payment borrowed by him. At the most lender may be questioned the source of that amount, and there are Chartered Accountants to show such entries to claim exemptions or to avoid such disclosures.
There is no influence of such clauses between a lender and a borrower.