If I borrow 10 lakhs from a friend, how much tax do I need to pay?
Do I need to pay tax on the entire 10 lakh by showing it as my income? or only on the profit that I earn by investing 10 lakhs
Hey @Jack_R,
There is no tax required to be paid on the borrowed loan amount. The profits earned will be taxable, depending on the intent of trading.
Thanks, do I need a loan agreement to borrow the money? How does it work?
Hi @Jack_R,
Yes, to be on the safer side, you should get a loan agreement done. You can provide the same to the ITD as proof of the amount received in your bank account.
Hi @Quicko
Is there any cap on the interest rate my friend can charge me on papers?