Paid money on someone else's behalf

You need to show as loan given in your income tax file.

The amount of interest received by you on the loan amount need to be shown in income side. If you are filling itr 4 then in balance sheet you have to show the loan amount.

Practically, there should not be much problem. However, you should avoid doing these kind of transactions.

Because, if income tax department comes to know about it they can treat it as cash deposit and apply equivalent amount of penalty.

Please feel free to call/ revert in case you need more clarity.

Thanks and regards

Abhishek Dugar

CA CS B.Com

you are self employed or salaried ?

No, you don't need to show it in your return of income. No, income tax department does not track each and every transaction.

If you are receiving interest from your friend on the loan amount then it needs to be shown as interest income. Hopefully the invoice of bike has been raised in your friend name

Hi

It's a rare chance of such transaction being picked up.

You can show the amount as loan to your friend. There is no requirement to show anything in the income tax returns.

Hello,

It is not a problem at all.

I am assuming this did not happen at the time of demonitisation.

Trust this clarifies your query.

Feel free to call / get back in case of further clarifications.

Thanking You.

Regards,

Rohit R Sharma

BCOM, FCA, LLB, CERT. FAFP