No Proof for taking loan

Hi, 
My name is Sanjay. I am a Real Estate Agent. I dont have any documents of paying tax and neither I have any legal documents to show that I am running a business. What can be done for taking loan? Or What are the ways to say my family that I can't take loan from the bank?
Asked 1 year ago in Income Tax from Bangalore, Karnataka
First of all , get your bank account statement and cash book updated so to capture your all business receipts and accordingly you should arrange all your expenses bill and their payment detail . Based on this you can ask your CA to prepare accounts and get the ITR filed .  You can get your financials prepared and then apply for the loan . 

Since you are a real estate agent , please ensure that you should have valid service tax registration and collect the service tax  , pay to government and file the service tax return . 
Prakash Sinha
CA, Delhi
112 Answers
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If you have taxable income, you need to file your IT returns and pay taxes as applicable. If you are carrying on your real estate agency business as a proprietor, normally there will be no documents. You need to have partnership deed, if you are carrying on the business as a partnership. If you don't have partnership deed, it is unregistered firm.

You may take loan only if you are confident of repayment. Otherwise you will get into debt trap situation. If you are not confident about your repayment capability for any reason, be honest with your family and say that you want to be prudent. 

If you have the confidence to make the repayment of loan, you can file your Income Tax returns for the last two financial years, i.e., 2013-14 and 2014-15 by disclosing whatever income you earned and pay whatever be the tax liability.

If you intend to take loan for purchase of a house, it may be worthwhile to do so because normally the value of the  property appreciates, while the loan amount gets reduced with regular repayments. You need to balance between present rentals with the likelihood of appreciation and the EMIs that you need to pay, so that you don't get into liquidity crunch, while repaying the loan. 
B Vijaya Kumar
CA, Hyderabad
290 Answers
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If you are doing a business then you should open a current account with any bank and deposit all your business receipts in that account and all expenses of business may be paid out of said bank account. You should maintain invoices for the services offered by you and also obtain original bills and vouchers for expenses. Based on this books of account may be compiled and a return of Income can be filed.
Vijay N. Kale
CA, Hyderabad
248 Answers
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Hi Sanjay. The second one is the typical question you are asking. It was better you would have asked about the second question to your friend.

In the first question there are some Banks which offer loan based on your banking transactions. Other Banks with out IT Returns (filed with a gap of 6 months) will not give loan. But some private Banks now are offering loans based on previous track record or Bank statement.

Also if your Bank where you are having Account is ready for accepting 2 years IT Returns which are filed just now, then you can file the IT Returns and submit them to the Bank for loan. Also you can take some licence like labour or other applicable in your state and submit to the Bank. If your Bank is satisfied with that they can provide you loan.

The second answer is solely dependent on you how you can answer your family.
Shyam Sunder Modani
CA, Hyderabad
953 Answers
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You may file your 2 years ITR ...................with Commission Income in Cash ....................with Income Tax Rs. 1000 -Rs.2000)................Loan can be applied on this basis.....
We can also provide professional help @ Rs.5000/- for the same...
Shiv Kumar Agarwal
CA, Delhi
195 Answers
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