CONSIDERING the granting of credit to the lender lending certain funds (the “loan” to the borrower) and the borrower who will repay the loan to the lender, both parties undertake to respect, respect and respect the commitments and conditions set out in this agreement: when a guarantor participates in a PR, the PR is provided by the borrower for the benefit of the guarantor, which then confirms them to the lender. As far as stamp duty is concerned, the stamps to be affixed are based on the amounts and the relevant stamp duty rates of the State in which the document is executed must be consulted. PRs are normally used for loans with a maximum term of 3 years, which can be extended by the so-called renewal letter, which has the same wording as the PR but relates to the first PR. While PRs are governed by the Negotiable Instruments Act, credit agreements are covered by the Contracts Act. You have to be very careful with credit agreements with the clause, and the design of the agreement is very important, because there can be a dispute about counterfeiting, etc. It is possible that it is also necessary to verify the ownership of the asset that is given as collateral. Stamp duty varies depending on the duration of the loan, the quantum and the nature of the loan. Hello Sreekanth Reddy, very informative article. I borrow Rs 12 Lakhs from a friend at 10% P.A interest on monthly reducing assets and I plan to repay in monthly instalments within three years.
What is the value of the reqd stamp paper. Rule 60 is fine. (Rs 1 for each year 20000). I am in Karnataka. Pls, let me know. Greet Manoj. Hello Sreekanth, First of all I would like to thank you for your kind blog to help people like me. I gave my uncle, 2.9 years ago, about 10 Lakes Loan at 18% interest, and he gave me a ticket. This PR expires in three months. As of today, the outstanding credit with interest is about 16.5 lakes. He paid only 50,000. (FYI – RBI published, on September 9, 2014, a notice of “Guidelines on Intentional Defaults”.
Subsequently, a guarantor of an intentional late payment may also be treated as a “defaulter”. So think twice before accepting and signing as a guarantor of a loan) Zero-interest loans are not taxable in the hands of the lender or borrower. But if you calculate the interest rate, the interest earned on the loan should be treated as “income from other sources.” This income should be reported on your income tax return (lender). Dear srinivas, yes, keep going! I think a credit agreement is a better option. Please contact a civil lawyer. As of 2017, all rental contracts are in his name and indicate in his income tax the income of the rented house. It`s true? Otherwise, I do not advise you. “Such a contract/agreement will not be valid if your wife claims her right to the property and a legal option is taken to that effect. The Hindu Marriage Act and other related laws terminate the agreement signed between you and your wife.
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