Tax implications on the money borrowed by a friend

Q & A Forum › Category: Home Loans & Credit › Tax implications on the money borrowed by a friend

ashokdk1 asked 9 years ago

I have transferred Rs.5,00,000 to my friend's saving account as a hand loan. I didn't take any Promissory note or any document. My friend had transferred it back the same amount to me after 3 months. What are the tax implication on this transaction. Do I have to show this in my income tax returns?

2 Answers

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Sreekanth Staff answered 9 years ago

Hi, Did you get any interest income on this transaction? Suggested readings : https://www.relakhs.com/promissory-note-loan-agreement-india/ https://www.relakhs.com/personal-financial-mistakes/

ashokdk1 replied 9 years ago

No, I didn’t take any interest.

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Sreekanth Staff answered 9 years ago

In that case, as it is an interest free loan, you do not have any income, there is no need to declare anything in your ITR. Suggested readings : https://www.relakhs.com/new-itr-forms-ay-2017-18-fy-2016-17/