Few lenders are aware that if you calculate the interest on the loan amount, then interest income is taxable. Interest is taxed as „income from other sources“ based on the lender`s taxable oral width. That`s why you do your calculations before the personal loan. My father gave a loan of 10 lakes to his neighbour with 2% interest and registered in by note. Now he is not paying the interest amount properly. Could you please suggest how we could take legal action against him, what is the procedure? Pronote was published on 2014 Sep. A communication lies somewhere between the informality of an IOU document (I Owe You) and the rigidity of a credit contract. An IOU document simply acknowledges the existence of a LOAN. An Créditsory Note not only recognizes that there is a credit, but also contains a specific payment promise. Dear Patrick, I have no expertise on this subject. Suggest consulting a lawyer or accountant who specializes in NRI/Foreign Investors.
Yes, in any case, do not lend your money by making only the note or the loan contract. Guarantee: A secured loan is a loan that is issued and supported by collateral to be used in case the borrower is no longer able to pay. Security is usually a physical asset that can be seized and/or sold by the lender to pay the balance of the loan. Guarantees can be a car, a house, stocks or bonds. A friend of mine is in the United States and his wife is in India. His wife expects money from her husband so she can take a country and build a house in Hyderabad. But she wants to keep the property in her name and she is ready to repay her husband in the future (interest and principal amount). Now, what type of loan contract should be established between wife and husband and the loan contract should be no problem, even if there is a problem in the future, such as divorce/separation, etc. It is therefore always advisable to make the credit process legally valid and written. This helps secure your money and help your friend or family.
If you decide to borrow money, it is best to have an open and open debate about the possible problems or consequences of the loan.