Tax on borrowed money
Archana
(Querist) 07 April 2018
This query is : Resolved
Hi,
I am a salaried person, working in a private organization. I want to borrow money from one of my friend who is a government employee. I am afraid if the tax will be deducted on this amount once I receive the money in my account. Kindly suggest how the tax will be charged.
Archana
(Querist) 07 April 2018
Tax on borrowed money
Hi, I am a salaried person, working in a private organization. I want to borrow money from one of my friend who is a government employee. I am afraid if the tax will be deducted on this amount once I receive the money in my account. Kindly suggest how the tax will be charged.
Ms.Usha Kapoor
(Expert) 08 April 2018
Money that is borrowed is not taxable. If you borrow it and don't pay it back, it can be classified as income and be subject to income tax. If you borrow money and are not being charged interest, the government will consider the cost of interest to be income that is taxed.
Guest
(Expert) 08 April 2018
@ Ms. Usha Kapoor,
Very senseless reply, if you say "interest on borrowed money is chargeable to tax." Where is the question of earning interest when a borrower has to pay interest on borrowed money?
Dr J C Vashista
(Expert) 08 April 2018
I endorse the expert opinion and advise of Mr. Jigyasu.
Dr J C Vashista
(Expert) 08 April 2018
@ Archana,
How much money is being borrowed?
What is the rate of interest and for how much time period?
Whether the lender is in the business of lending money and has obtained licence?
Whether lender and borrower will have to reflect the transaction in their ITR?
Vague question without relevant information can not lead to be considered, analysed and form an opinion for guidance as responded by an impersonating expert hereinabove.
Ms.Usha Kapoor
(Expert) 10 April 2018
interest PAID IS ALLOWED AS DEDUCTION FROM INCOME TAX.although YOU PAY INTEREST ON BORROWED FUNDS IT ACT WANTS TO GIVE RELIEF TO ASSESSES IN THE FORM OF DEDUCTIONS ON interest paid WHICH ARE ALLOWED.NO TAX IS -PAID TO THE EXTENT OF ALLOWABLE DEDUCTIONS.
Guest
(Expert) 10 April 2018
The other day, she herself claimed that she is of a very thick skin. So, it is hard to make her learn from her blunder mistakes through her profusely misleading advice. When she is unable to understand the question, what is the relevance of his answer? She presumes anything for anything else!
Guest
(Expert) 10 April 2018
Ms. Archana,
Neither a Government servant is authorised to give loan, nor to deduct tax, as TDS from that amount at the time of making payment. Further, since it will be a friendly loan, whatever rate of interest is decided to be paid by you by mutual understanding, the lender will be liable to pay tax to the Government on his earning in the shape of interest. You are not liable to pay any tax in addition to the interest paid to your friend.
Ms.Usha Kapoor
(Expert) 10 April 2018
I've changed the earlier answer today.Now my answers posted here are 100% correct.
Guest
(Expert) 10 April 2018
@ Ms. Usha Kapoor,
Your latest reply as "I've changed the earlier answer today.Now my answers posted here are 100% correct," itself is a clear proof and admission on your part that your earlier advice was % wrong.
Moreover, there is nothing new in your corrected advice, as that has already been rendered by other experts.
Ms.Usha Kapoor
(Expert) 11 April 2018
Except Vashista who ddn't answer the full query I'm not finding any other Tax expert answering this query. I'm the only person who rendered 100% correct answers. Read answers.
Ms.Usha Kapoor
(Expert) 11 April 2018
Old fox has ex0perience in civil matters. He doesn't know tax matters. I did some tax matters and got thanks also for them.. In LL.B final my optional was Taxation in which I scored 90%.
Ms.Usha Kapoor
(Expert) 11 April 2018
In the initial days of my joining while I was finishing an answer for a tax query your Dhingra Ji grew friendly with me. and blessed me that you have bright future. He also gave thanks without my asking.
Ms.Usha Kapoor
(Expert) 11 April 2018
I say Old fox and Dhingra Ji don't do tax matters as it is complicated for them.With so many tensions I'm doing.Very few Advocates are dong tax matters.It is a big Ocean_IT act. changes frequently with Amendments, finance Acts frequent change of of law etc. Their answers differ from my answers,. So I'm the only person who replied correctly.
Guest
(Expert) 11 April 2018
@ Ms. Usha Kapoor,
What about Mr. Dhingra''s advice before you corrected your answer? You corrected your reply only after copying his reply. If you scored 90% of marks in taxation, there should not have been any reason for your wrong and misleading answer. You can pretend to be a legal expert, but cannot prove your worth in legal matters. If Mr. Dhingra can bless you with anything unjustifiable that does not mean I should follow him blindly. You may ask Mr. Dhingra, if he can certify your first answer to be correct.
Ms.Usha Kapoor
(Expert) 11 April 2018
i DIDN'T C0PY. yesterday hE WAS NOT THERE > i DIDN'T READ HIS REPLY. i D0N'T HAVE PATIENCE TO READ SUCH LENGTHY REPLIES. when i MYSELF IS PROFICIENT IN iNCOME TAX MATTES nO NEED FOR ME TO COPY OTHERS. i'D TEACH Y0U tAX LAW IF YOU ARE INTERESTEDL similarly muslim PROPERTY LAW calculations MANY ADVCATES DONT KNOW . DESPITE SHOWING MY PROWESS IN THESE SUBJECTS YOU ARE AGAIN AND AGAIN ASKING.I DIDN'T READ DHINGRA'S ANSWER AS HIS KNOWLEDGE OF TAX MATTERS IS LIMITED.
Ms.Usha Kapoor
(Expert) 11 April 2018
Dont under estimate my worth. If encouragement and opportunity are given I'd rise like a phoenix from Ashes.
Guest
(Expert) 11 April 2018
It is not a case of under estimation, but you gave proof of your worthlessness in law by yourself. Mr. Dhingra's reply was very much there before you corrected your reply. So far as copying is concerned, even today, I have pointed out the incidents of your copying others answers in your replies, particularly of Mr. Srajadv460.
Don't try to claim credit on others contributions.
Guest
(Expert) 11 April 2018
@ Mr. Jigyasu and Ms. Usha Kapoor,
Please don't drag my name in your mutual dispute. I cannot certify correctness of any wrong advice of any expert. I posted my reply only after I found the advice of Ms. Usha Kapoor, as wrong.
But please don't fight by using my name, as your tools.
Guest
(Expert) 11 April 2018
Agreed sir, but it was Ms. Usha only, who tried to justify his wrongs in your name. But, I am also sorry to make it clear that I cannot follow you blindly if any time in past you would have endorsed her actions or wrongs. I am of the view that she uses others names to justify her wrongs, when she finds herself unable to justify her advice as per law of the land.
Ms.Usha Kapoor
(Expert) 11 April 2018
I n some places I agreed with him and in some places slightly different advice I've given.I Lost in touch with the profession than 25years ago.To win some points for all off fame Answered some 11 or12 queries today.Two Tax matters came to myh0use and the clients appreciated my talent and gave me Rs1000 each.Then where is the question of my copying Dhingraji's answers. Till now I didn't even read. He didn't mention There is no taxon borrowed funds etc I went straight to the query rather than in a circum locutous way.Those Tax clients are1 from Gujarat and the other from Hyderabad.
Ms.Usha Kapoor
(Expert) 11 April 2018
If you have doubt refer any tax book or browse the internet of my advice. and its correctness.
Guest
(Expert) 11 April 2018
Ms. Usha Kapoor should know that the present question was a very simple issue of commonsense, not a part of ocean, as she claimed to be so. She should better refrain from boasting. When she could not give a correct advice on a very simple issue pertaining to some common sense that a borrower, who pays interest on borrowed money, cannot be made to pay anything like tax in addition to the interest paid by him, what can be expected of her if some problem pertaining to her so called tax ocean comes before her for solution. I can very well guess that her client would definitely repent after getting involved in complications by consulting her.
Guest
(Expert) 11 April 2018
@ Ms. usha Kapoor,
Your own statement, "I Lost in touch with the profession than 25years ago." reveals that you lost in touch with the profession 25 years back. If you believe that tax subject is a vast ocean, how you can claim to be expert on that, when you have already got out of touch for the last 25 years? You should have known that this subject gets vast amendments every year. Nothing of the tax structure of 25 years back is valid in these days.
Ms.Usha Kapoor
(Expert) 11 April 2018
Why 2nd answer is not correct? If you are paying interest on borrowed funds IT Act gives the benefit of deductions which you can deduct from total taxable income. Due to Lack of knowledge in IT matters you or your Dhingra are understanding the law in an incorrexct way.You can claim deductio0ns on a particular tax item for your benefit. Here your paying interest something goes out so you can claim credit or benefit in lieu of interest payment in the form of deductions.
Ms.Usha Kapoor
(Expert) 11 April 2018
I've some It books at home of recent origin;. On and off I read them.
Guest
(Expert) 11 April 2018
You may start worshiping those IT books, which are at your home, if you can't learn anything out of them. That is totally beyond your reach. You are harping the same tune of "benefit of deductions which you can deduct from the taxable income," but where that question arises of deduction from taxable income, when the querist has shown his doubt through his statement of deduction of tax from the borrowed amount, as he stated, "I am afraid if the tax will be deducted on this amount once I receive the money in my account." If you cannot understand this simple statement, nobody can make you understand on any subject. I have not seen such a stubborn person like you, who is bent upon imposing her totally wrong advice on one and all, as if correct.
Ms.Usha Kapoor
(Expert) 11 April 2018
What I wrote are 100% correct answers. Despite writing correctly as peeling bananas and keeping it in your hand if you don't understand is that is your fate; I've actually come trying for friendship.Here you are giving Gallies.
Ms.Usha Kapoor
(Expert) 11 April 2018
Tax will not be deducted. %ageof concession will be deducted.That shows you are a slow learner. If you want to practice on IT law you need to be good at calculations, good at tax law and case law. When I was practising in Highc0ourt very few tax Advocates were there.I was considered the most intelligent among lady advocates including many male Advocates as well.These concessions will be added to non taxable inco9me or profit after tax. Same with Salaried person. In lieu of interest payment on borrowed funds a 5%or so of concession or deductible concessions are provided by IT act./ So he can deduct and rest will be taxed.A particular amount will be available for deduction under section 80. That will be deducted from your taxable income and saved.
Guest
(Expert) 11 April 2018
Neither facts can change nor law on wasteful discussions. Better stop stretching the thread unduly.
Ms.Usha Kapoor
(Expert) 11 April 2018
Read IT Act 1961 thoroughly. if you've tax brain you'd understand.
Ms.Usha Kapoor
(Expert) 11 April 2018
I've excellent Grasping power, excellent memory power etc If used properly I'd have cracked CA, ICWA, and ACS.One of my Punjabi friends would say this usha is grasping everything pretty fast, I'm feeling jealous of her. She was my neighbor also doing law and my classmate.Lack of encouragement from anyone killed these God given gifts gradually.That Meena Kapoor and I used to do combined studies.
Guest
(Expert) 11 April 2018
You may continue to read IT Act, if you can gather anything out of that.
However, makhhan maalish seems to be your favourite habit due to which it seems, people had been making fool of you by their false appreciations. If you can crack CA, ICWA, why not try now by utilising your time purposefully, as you seem to have enough time that you are wasting here at LCI and begging for points time and again.
Ms.Usha Kapoor
(Expert) 11 April 2018
Those gifts gradually I lost means I can't do such tough courses now. Moderately tough PGDLPO I did in 2008 online course in 2009 AND GOT DISTINCTION.TILL marriage my mind MIND WAS VERY SHARP. AFTERWARDS i GRADUALLY LOST DUE TO FRICTION BETWEEN US.I should Have done after law course during which my grasping and memory power was at their peak.
Guest
(Expert) 11 April 2018
Marriage seems to have proved as a curse to this chipku lady, who is bent upon to write her autobiography in reply of a simple question on Tax Deduction at Source. She may continue with great pleasure till the querist has patience to go through her boastful autobiography Cause of friction between you and your husband can well be guessed, seemingly your obstinacy and assertiveness of your wrong perceptions, which is demonstrated enough even through your posts in this thread.
