Hi Unni,
I don't see any issue in this transaction. You can lend money your money to earn interest.
Investment return as income source
Hi Sir, I am planning to invested in a sole proprietorship business for 10% return monthly. I will be getting a legal agreement containing all the terms regarding the investment and its return policies. My doubt is , since I am not an financial institution, am I legally eligible to do such investments. Can I show the income source of 10% while doing Tax filling? Thanks in Advance Regards, Unni
Asked 7 years ago in Income Tax
Yes you can show this income under the head income form other sources while filling income tax return
Sir, It is more like you have provided loan to a sole proprietorship business against 10% interest. Yes, it will be taxable as Income from other source
Hi Unni,
As per my understanding, you are lending money to that sole proprietorship and will earn monthly interest. You are not getting any share in the profit.
You are allowed to enter into such lending transactions, provided they are routed through a bank account (cheque/electronic transfer).
The income which you will earn will be interest income and is taxable as Income from Other Source.
Trust this clarifies.
Regards,
Keerthiga Padmanabhan
M.Com., CA, LLB
Hello Sir/Madam, I am planning to Register a Sole Proprietorship Service Company. Is there any restrictions on what type of service I will be doing with my company? I mean I am planning to give multiple services like IT services, Financial services etc.. through same organization. If I earn an income through my service company, do I have to pay GST for that service as well as Income Tax for the same income? For example, If I earned rs 10 Lakh from one of my client for some services, do I have to pay GST percentage as well as Income tax on the income I received for the same Year? Thanks Again. Regards, Unni
Asked 7 years ago
Yes, ypu can do multiple type of services.
GST and Income tax two different kind of taxes. Yes, you have to pay both. However, applicability of GST differes in different kind of scenerios
Hi Unni,
You can do multiple business under your proprietorship.
Yes, you have to compulsorily pay income tax. As far as GST is concerned, if your total turnover does not exceed 20 lacs and you don't provide inter state services, you don't need to register and pay GST.
Hello,
Yes, you will have to pay GST as well as Income Tax on your income.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
Income tax and GST are two different taxes and both will be payable as per the relevant provisions of the said Acts.
Regards,
Keerthiga Padmanabhan
M.Com., CA, LL.B
Hi Madam/Sir, I would like to know the legal side of lending money. Am I eligible to lend money on interest to any of my friends/relatives/registered shops or companies without any agreements? And show the same while filling income Tax? Is agreement must for doing such transactions? Thanks, Unni
Asked 7 years ago
Hello,
This is very difficult to say unless we understand the exact modus operandi of how you do what you do. A slight here and there may make a difference.
Hi,
There is nothing that bars you from lending money on interest. You can show the interest earned as Income in IT Returns.
Having an agreement is advisable
Hi Unki,
This website is mainly focused in tax. For legal implication, best source would be to raise query at www.kaanoon.com.
Please feel free to call/ revert in case you need more clarity.
Thanks and regards
Abhishek Dugar
CA CS B.Com
Hi
Agreement is good to have but not must.
Please feel free to call/ revert in case you need more clarity.
Thanks and regards
Abhishek Dugar
CA CS B.Com
That is difficult to comment upon. Will have to understand you entire business strategy.
Regards,
Keerthiga Padmanabhan
M.Com., CA, LL.B
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