TaxTMI 
TaxTMI 
can interest free loan be added u/s 56[2][v] ? as any sum recd?
Interest free loan
21 Aug 2008 
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Interest-free loan not treated as income under section 56(2)(v) when repayment obligation is documented by promissory note or cheque.
An interest-free advance is characterised as a loan with a reciprocal repayment obligation and thus treated as a capital receipt, not a taxable sum received without consideration; documentation such as a promissory note, bill of exchange or post-dated cheque is recommended to evidence the repayment undertaking. (AI Summary)
An interest-free advance is characterised as a loan with a reciprocal repayment obligation and thus treated as a capital receipt, not a taxable sum received without consideration; documentation such as a promissory note, bill of exchange or post-dated cheque is recommended to evidence the repayment undertaking. (AI Summary)