Mixing
1 crore borrowed from friend at 7% interest per annum
Clash Royale CLAN TAG#URR8PPP
.everyoneloves__top-leaderboard:empty,.everyoneloves__mid-leaderboard:empty margin-bottom:0;
up vote
1
down vote
favorite
If my friend transfers INR 1 crore (= INR 1,00,00,000) into my bank account and we make a legal document for the same to return the amount at 7% per annum for next 12 yrs, should I pay tax on the same?
If my salary is INR 1.5 lakh (= INR 1,50,000) per month, and I pay INR 60,000 per month to my friend to repay the debt, will income tax be deducted as if I were earning only INR 90,000/month, or will income tax be deducted from the INR 1.5 lakh/month salary, and I have to pay INR 60,000 each month to my friend from what is left of my salary after the income tax is deducted?
income-tax india tax-deduction debt personal-loan
edited 4 hours ago
Dilip Sarwate
23.7k23291
asked 4 hours ago
New to finance
61
New contributor
New to finance is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
add a comment |Â
up vote
1
down vote
favorite
If my friend transfers INR 1 crore (= INR 1,00,00,000) into my bank account and we make a legal document for the same to return the amount at 7% per annum for next 12 yrs, should I pay tax on the same?
If my salary is INR 1.5 lakh (= INR 1,50,000) per month, and I pay INR 60,000 per month to my friend to repay the debt, will income tax be deducted as if I were earning only INR 90,000/month, or will income tax be deducted from the INR 1.5 lakh/month salary, and I have to pay INR 60,000 each month to my friend from what is left of my salary after the income tax is deducted?
income-tax india tax-deduction debt personal-loan
edited 4 hours ago
Dilip Sarwate
23.7k23291
asked 4 hours ago
New to finance
61
New contributor
New to finance is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
The interest income goes to your friend, and in Australia (not sure about India), borrowed principal isn't taxed. What tax are you asking about when you say "tax on the same"?
– Lawrence
4 hours ago
add a comment |Â
up vote
1
down vote
favorite
up vote
1
down vote
favorite
If my friend transfers INR 1 crore (= INR 1,00,00,000) into my bank account and we make a legal document for the same to return the amount at 7% per annum for next 12 yrs, should I pay tax on the same?
If my salary is INR 1.5 lakh (= INR 1,50,000) per month, and I pay INR 60,000 per month to my friend to repay the debt, will income tax be deducted as if I were earning only INR 90,000/month, or will income tax be deducted from the INR 1.5 lakh/month salary, and I have to pay INR 60,000 each month to my friend from what is left of my salary after the income tax is deducted?
income-tax india tax-deduction debt personal-loan
edited 4 hours ago
Dilip Sarwate
23.7k23291
asked 4 hours ago
New to finance
61
New contributor
New to finance is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
If my friend transfers INR 1 crore (= INR 1,00,00,000) into my bank account and we make a legal document for the same to return the amount at 7% per annum for next 12 yrs, should I pay tax on the same?
If my salary is INR 1.5 lakh (= INR 1,50,000) per month, and I pay INR 60,000 per month to my friend to repay the debt, will income tax be deducted as if I were earning only INR 90,000/month, or will income tax be deducted from the INR 1.5 lakh/month salary, and I have to pay INR 60,000 each month to my friend from what is left of my salary after the income tax is deducted?
income-tax india tax-deduction debt personal-loan
income-tax india tax-deduction debt personal-loan
edited 4 hours ago
Dilip Sarwate
23.7k23291
asked 4 hours ago
New to finance
61
New contributor
New to finance is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
edited 4 hours ago
Dilip Sarwate
23.7k23291
asked 4 hours ago
New to finance
61
New contributor
New to finance is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
edited 4 hours ago
Dilip Sarwate
23.7k23291
edited 4 hours ago
Dilip Sarwate
23.7k23291
edited 4 hours ago
Dilip Sarwate
23.7k23291
23.7k23291
asked 4 hours ago
New to finance
61
New contributor
New to finance is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
asked 4 hours ago
New to finance
61
asked 4 hours ago
New to finance
61
61
New contributor
New to finance is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
New contributor
New to finance is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
New to finance is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
The interest income goes to your friend, and in Australia (not sure about India), borrowed principal isn't taxed. What tax are you asking about when you say "tax on the same"?
– Lawrence
4 hours ago
add a comment |Â
The interest income goes to your friend, and in Australia (not sure about India), borrowed principal isn't taxed. What tax are you asking about when you say "tax on the same"?
– Lawrence
4 hours ago
The interest income goes to your friend, and in Australia (not sure about India), borrowed principal isn't taxed. What tax are you asking about when you say "tax on the same"?
– Lawrence
4 hours ago
The interest income goes to your friend, and in Australia (not sure about India), borrowed principal isn't taxed. What tax are you asking about when you say "tax on the same"?
– Lawrence
4 hours ago
add a comment |Â
3 Answers
3
active
oldest
votes
up vote
2
down vote
Loan repayment can't be tax deductible except for home loan. If the home loan for first house is taken from close friends and relatives, it has the same tax benefits as if taken from bank. The rate of interest in such cases can't be more than prevailing market rates.
Your friend has to pay taxes on interest income.
answered 1 hour ago
Dheer
47.8k959140
add a comment |Â
up vote
2
down vote
This is a question that is quintessentially Indian, showing no understanding of tax issues and repayment of loans. The numbers make no sense whatsoever. Monthly payments of INR 60K for 12 years add up to INR 8640K which is less than the INR 10000K that was borrowed. So, unless the OP is planning on an unmentioned balloon payment at the end of the 12 years, the loan will still not have been paid off. The actual payment (EMI) for a 12-year loan at 7% is about INR 1.02,840 lakhs, and the sum total of payments is a little over INR 1.48 crore.
Be that as it may,
There is no income tax due from the OP on the loan proceeds of INR 1 crore received from the friend; amounts received as loans are not taxable income to the borrower. The transaction might be subject to the new GST tax but that's a separate issue. The interest component of the monthly repayment (EMI) is taxable income to the OP's friend; the component of the EMI that represents principal is not taxable income to the OP's friend. No part of the EMI can be deducted from gross income to arrive at the taxable income, unless the loan is structured as a mortgage secured by the OP's home.
answered 59 mins ago
Dilip Sarwate
23.7k23291
add a comment |Â
up vote
1
down vote
Welcome new user.
If YOU are getting the loan money and YOU are PAYING the interest, you do not pay any tax.
(You're not the one GETTING money.)
Your friend is GETTING money, so your friend pays tax. It is income, like any other income.
answered 3 hours ago
Fattie
3,44221631
add a comment |Â
3 Answers
3
active
oldest
votes
3 Answers
3
active
oldest
votes
active
oldest
votes
active
oldest
votes
up vote
2
down vote
Loan repayment can't be tax deductible except for home loan. If the home loan for first house is taken from close friends and relatives, it has the same tax benefits as if taken from bank. The rate of interest in such cases can't be more than prevailing market rates.
Your friend has to pay taxes on interest income.
answered 1 hour ago
Dheer
47.8k959140
add a comment |Â
up vote
2
down vote
Loan repayment can't be tax deductible except for home loan. If the home loan for first house is taken from close friends and relatives, it has the same tax benefits as if taken from bank. The rate of interest in such cases can't be more than prevailing market rates.
Your friend has to pay taxes on interest income.
answered 1 hour ago
Dheer
47.8k959140
add a comment |Â
up vote
2
down vote
up vote
2
down vote
Loan repayment can't be tax deductible except for home loan. If the home loan for first house is taken from close friends and relatives, it has the same tax benefits as if taken from bank. The rate of interest in such cases can't be more than prevailing market rates.
Your friend has to pay taxes on interest income.
answered 1 hour ago
Dheer
47.8k959140
Loan repayment can't be tax deductible except for home loan. If the home loan for first house is taken from close friends and relatives, it has the same tax benefits as if taken from bank. The rate of interest in such cases can't be more than prevailing market rates.
Your friend has to pay taxes on interest income.
answered 1 hour ago
Dheer
47.8k959140
answered 1 hour ago
Dheer
47.8k959140
answered 1 hour ago
Dheer
47.8k959140
answered 1 hour ago
Dheer
47.8k959140
47.8k959140
add a comment |Â
add a comment |Â
up vote
2
down vote
This is a question that is quintessentially Indian, showing no understanding of tax issues and repayment of loans. The numbers make no sense whatsoever. Monthly payments of INR 60K for 12 years add up to INR 8640K which is less than the INR 10000K that was borrowed. So, unless the OP is planning on an unmentioned balloon payment at the end of the 12 years, the loan will still not have been paid off. The actual payment (EMI) for a 12-year loan at 7% is about INR 1.02,840 lakhs, and the sum total of payments is a little over INR 1.48 crore.
Be that as it may,
There is no income tax due from the OP on the loan proceeds of INR 1 crore received from the friend; amounts received as loans are not taxable income to the borrower. The transaction might be subject to the new GST tax but that's a separate issue. The interest component of the monthly repayment (EMI) is taxable income to the OP's friend; the component of the EMI that represents principal is not taxable income to the OP's friend. No part of the EMI can be deducted from gross income to arrive at the taxable income, unless the loan is structured as a mortgage secured by the OP's home.
answered 59 mins ago
Dilip Sarwate
23.7k23291
add a comment |Â
up vote
2
down vote
This is a question that is quintessentially Indian, showing no understanding of tax issues and repayment of loans. The numbers make no sense whatsoever. Monthly payments of INR 60K for 12 years add up to INR 8640K which is less than the INR 10000K that was borrowed. So, unless the OP is planning on an unmentioned balloon payment at the end of the 12 years, the loan will still not have been paid off. The actual payment (EMI) for a 12-year loan at 7% is about INR 1.02,840 lakhs, and the sum total of payments is a little over INR 1.48 crore.
Be that as it may,
There is no income tax due from the OP on the loan proceeds of INR 1 crore received from the friend; amounts received as loans are not taxable income to the borrower. The transaction might be subject to the new GST tax but that's a separate issue. The interest component of the monthly repayment (EMI) is taxable income to the OP's friend; the component of the EMI that represents principal is not taxable income to the OP's friend. No part of the EMI can be deducted from gross income to arrive at the taxable income, unless the loan is structured as a mortgage secured by the OP's home.
answered 59 mins ago
Dilip Sarwate
23.7k23291
add a comment |Â
up vote
2
down vote
up vote
2
down vote
This is a question that is quintessentially Indian, showing no understanding of tax issues and repayment of loans. The numbers make no sense whatsoever. Monthly payments of INR 60K for 12 years add up to INR 8640K which is less than the INR 10000K that was borrowed. So, unless the OP is planning on an unmentioned balloon payment at the end of the 12 years, the loan will still not have been paid off. The actual payment (EMI) for a 12-year loan at 7% is about INR 1.02,840 lakhs, and the sum total of payments is a little over INR 1.48 crore.
Be that as it may,
There is no income tax due from the OP on the loan proceeds of INR 1 crore received from the friend; amounts received as loans are not taxable income to the borrower. The transaction might be subject to the new GST tax but that's a separate issue. The interest component of the monthly repayment (EMI) is taxable income to the OP's friend; the component of the EMI that represents principal is not taxable income to the OP's friend. No part of the EMI can be deducted from gross income to arrive at the taxable income, unless the loan is structured as a mortgage secured by the OP's home.
answered 59 mins ago
Dilip Sarwate
23.7k23291
This is a question that is quintessentially Indian, showing no understanding of tax issues and repayment of loans. The numbers make no sense whatsoever. Monthly payments of INR 60K for 12 years add up to INR 8640K which is less than the INR 10000K that was borrowed. So, unless the OP is planning on an unmentioned balloon payment at the end of the 12 years, the loan will still not have been paid off. The actual payment (EMI) for a 12-year loan at 7% is about INR 1.02,840 lakhs, and the sum total of payments is a little over INR 1.48 crore.
Be that as it may,
There is no income tax due from the OP on the loan proceeds of INR 1 crore received from the friend; amounts received as loans are not taxable income to the borrower. The transaction might be subject to the new GST tax but that's a separate issue. The interest component of the monthly repayment (EMI) is taxable income to the OP's friend; the component of the EMI that represents principal is not taxable income to the OP's friend. No part of the EMI can be deducted from gross income to arrive at the taxable income, unless the loan is structured as a mortgage secured by the OP's home.
answered 59 mins ago
Dilip Sarwate
23.7k23291
answered 59 mins ago
Dilip Sarwate
23.7k23291
answered 59 mins ago
Dilip Sarwate
23.7k23291
answered 59 mins ago
Dilip Sarwate
23.7k23291
23.7k23291
add a comment |Â
add a comment |Â
up vote
1
down vote
Welcome new user.
If YOU are getting the loan money and YOU are PAYING the interest, you do not pay any tax.
(You're not the one GETTING money.)
Your friend is GETTING money, so your friend pays tax. It is income, like any other income.
answered 3 hours ago
Fattie
3,44221631
add a comment |Â
up vote
1
down vote
Welcome new user.
If YOU are getting the loan money and YOU are PAYING the interest, you do not pay any tax.
(You're not the one GETTING money.)
Your friend is GETTING money, so your friend pays tax. It is income, like any other income.
answered 3 hours ago
Fattie
3,44221631
add a comment |Â
up vote
1
down vote
up vote
1
down vote
Welcome new user.
If YOU are getting the loan money and YOU are PAYING the interest, you do not pay any tax.
(You're not the one GETTING money.)
Your friend is GETTING money, so your friend pays tax. It is income, like any other income.
answered 3 hours ago
Fattie
3,44221631
Welcome new user.
If YOU are getting the loan money and YOU are PAYING the interest, you do not pay any tax.
(You're not the one GETTING money.)
Your friend is GETTING money, so your friend pays tax. It is income, like any other income.
answered 3 hours ago
Fattie
3,44221631
answered 3 hours ago
Fattie
3,44221631
answered 3 hours ago
Fattie
3,44221631
answered 3 hours ago
Fattie
3,44221631
3,44221631
add a comment |Â
add a comment |Â
New to finance is a new contributor. Be nice, and check out our Code of Conduct.
New to finance is a new contributor. Be nice, and check out our Code of Conduct.
New to finance is a new contributor. Be nice, and check out our Code of Conduct.
New to finance is a new contributor. Be nice, and check out our Code of Conduct.
Sign up or log in
StackExchange.ready(function ()
StackExchange.helpers.onClickDraftSave('#login-link');
);
Sign up using Google
Sign up using Facebook
Sign up using Email and Password
Post as a guest
StackExchange.ready(
function ()
StackExchange.openid.initPostLogin('.new-post-login', 'https%3a%2f%2fmoney.stackexchange.com%2fquestions%2f100692%2f1-crore-borrowed-from-friend-at-7-interest-per-annum%23new-answer', 'question_page');
);
Post as a guest
Sign up or log in
StackExchange.ready(function ()
StackExchange.helpers.onClickDraftSave('#login-link');
);
Sign up using Google
Sign up using Facebook
Sign up using Email and Password
Post as a guest
Sign up or log in
StackExchange.ready(function ()
StackExchange.helpers.onClickDraftSave('#login-link');
);
Sign up using Google
Sign up using Facebook
Sign up using Email and Password
Post as a guest
Sign up or log in
StackExchange.ready(function ()
StackExchange.helpers.onClickDraftSave('#login-link');
);
Sign up using Google
Sign up using Facebook
Sign up using Email and Password
Sign up using Google
Sign up using Facebook
Sign up using Email and Password
The interest income goes to your friend, and in Australia (not sure about India), borrowed principal isn't taxed. What tax are you asking about when you say "tax on the same"?
– Lawrence
4 hours ago