Good morning Mr. Srikanth.
I am planning to give some amount out of my retirement benefits to my son. My son will make full repayment of his plot loan which is at a higher interest rate. Post that he will be giving me interest for the amount I have offered him along with monthly installments of principal amount. Please let me know whether any tax liability for my son for the amount received from me.
Thanks and regards
NARASIMHAN GOVINDARAJAN
2 Answers
Dear NARASIMHAN ji,
There wont be any tax liability to your Son.
The interest received by you is a taxable income and should be shown under the Head 'Income from other sources' in your ITR.
Advisable to give the loan amount through online banking mode and can also have a simple 'Loan agreement' done between both of you.
(This agreement can be shown by your son to his banker, in case they ask for Source of funds for clearing the outstanding loan amount.)
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