My uncle is a farmer and he owns a new house (ground floor and first floor) and farmland (1.67 hectares) worth 33 lakes. With my money, he paid bank loans, he took loans to others for higher interest rates. He refuses to pay me interest and plans to pay the interest on the capital in several tranches, provided he receives profits in agriculture. Hello Sir, I am taking out a loan (interest-free loan) of my sister`s Rs 5 Lakhs for the purchase at home. Is it advisable to enter into a credit contract to avoid any tax impact on me or my sister? Please advise Dear Venkatesh, yes, it is better to make a formal loan contract between you. Interest-free loans are not taxable for both lenders and borrowers. Another option may be through toxic deeds. Please make check/transfer transactions online and avoid cash transactions. Please read: 5 ways to transfer your property! Gifts – tax effects! An intelligent person is always the one who validates financial transactions by filing them in writing. The main benefits of such agreements between family members or friends are mentioned below: Dear Sreekanth, Thanks for your response and I also appreciate your response.
Still want to know if I do, it is possible, without registratton as nbfc, etc. given by rbi and I can calculate interest on the amount of the loan. So what agreement will be beneficial to me: a. Change of Sola, or/and b. Loan contract Dear Sir, My mother had given credits to the known person in cash. The loans were made in good faith and with the assurance that they will be repaid when necessary and with interest. However, the insurance turned out to be a big lie and the person started to avoid all our calls. We got blank cheques signed by her and we too got to sign it on the change of sola. We also have a photocopy of their real estate document.