Interest free loan from non-relative

[Guest]

Whether interest free loan taken from a non-relative, would be included in income of the receipient. Pl give any case laws or authoritative opinion, if any. If yes, pl suggest the ways to overcome the same. (Pradeep Gupta)

[Surender Gupta]

If it is returnable over a certain period, such loan shall not be included in the income. However, in case it is one time transaction, the same shall be taxable.

[Hanumanthaiah D.T]

Service tax liability in case of Franchise agreement - whether the francisor is liable to pay service tax in case even if franchisee are paying service tax

AI Summary

Interest free loan treatment: repayable structured loans avoid income inclusion, one time transfers risk taxable characterization. Interest-free loans from a non-relative are not ordinarily included in the recipient's income if they are structured as loans repayable over a specified period; conversely, a single one time receipt lacking a bona fide loan structure may be treated as taxable. Separate service tax considerations for franchise arrangements are distinct from income tax treatment of such advances.