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Do I have to pay tax if I borrow money from friend?
If you receive a personal loan from a friend or family member, there may be other tax implications, but the money still won’t be taxable income for you.
Can I give an interest free loan to a friend?
But any gift above Rs 50,000 from a friend (non-relative or anyone who falls outside the definition of ‘family’ under the Income Tax Act) during a financial year is taxable. However, if it’s a loan (with or without interest), it becomes tax-free. Interest-free loans are non-taxable for both lenders and borrowers.
How much money can be legally given to a friend in India?
Likewise, there is also no limit up to which a person can give gift in cash. However, there is a limit of ₹2 lakh beyond which one cannot accept cash from any person for any transaction including gift on one occasion. So you cannot accept cash gift beyond 2 lakhs from your grandmother at one time.
Is it legal to lend money to a friend?
Is lending money legal? Yes, it is. It’s legal to lend money, and when you do, the debt becomes the borrower’s legal obligation to repay. If you are lending money to a friend or family member, you may want to get the details in writing and signed by all parties in case there’s a conflict or misunderstanding.
How much interest should I charge on a loan to a friend?
Typically, lenders will charge anywhere from a friendly 3\% to an obscene 36\%. If this is to a family member or friend, you should probably stay on the low side. Still, don’t spend that interest before you get it, and better yet, don’t plan on getting it.
Can I lend money to a friend and charge interest in India?
Not many lenders are aware that If you are charging interest on loan amount then the interest income is taxable. The interest will be taxed as “income from other sources” as per tax slab of the lender. Therefore do your calculations before personal lending.
Is gifted money taxable in India?
As per the law, as it stands today which was amended in 2017, gifts received by any person by any person or persons are taxed in the hands of the recipient under the head ‘Income from other sources’ at normal tax rates.
How much money can I gift my friends?
How much is the annual gift allowance? You’re entitled to an annual tax-free gift allowance of £3,000. This is also known as your annual exemption. With your annual gift allowance, you can give away assets or money up to a total of £3,000 without them being added to the value of your estate.
Can you lend money without a license?
Applicability for registration and exemption. The Money Lending Act states that no money lender shall carry on the business of money-lending except in the area for which he has been granted a licence.
How much can you gift a friend tax-free?
The IRS allows every taxpayer is gift up to $15,000 to an individual recipient in one year. There is no limit to the number of recipients you can give a gift to. There is also a lifetime exemption of $11.7 million.