Getting money from family

My parents are govt employee any pay all the taxes according to the norms. If I borrow money from them, do I need to pay taxes? Will it be counted as my income source? What is the maximum limit for that if I dont want to pay taxes? Do I need to produce any proof of borrowing in case I.T officers ask?

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No need to pay any income taxes. Gift in blood relation is not taxable. You don’t even need to file any return.

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Thanks for the reply but still I have queries left unaddressed

No limit. No need for any documents. Your parents should be able to give proof of the money. (How they earned it)

You can take any amount of Money from parents as Loan / Gift. The document required will be his IT records and finance records if an Officer ask to ascertain the capability of giver. If its tax paid there wont be any issue.

Tax is on money earned not on money taken as Loan / gift from parents.

Can I take a loan from another person without falling income tax or any other direct tax category to invest in MFs/Equities? I can earn more profit by this way without investing my money. (Avg return of MFs is about 25% and paid interest on loan is 18%, thus 7% profit)

Hi @Shivam_Gupta,

There is a reason mutual funds investment ads run a disclaimer at the end of their ads. “Mutual funds returns are subject to market risks, please read the offer documents before investing”. Also one more line I would like to add is " past performance is no guarantee for future returns" I am not advising you against investing in mutual funds, I do invest a sizeable amount of my savings in mutuals funds. But taking a loan and investing that in mutual funds or direct equity is definitely a recipe for disaster.



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