Personal loan are not recognized for any kind of tax exemption. So you will not be eligible to get exemption for the same while filing your Income Tax Return.
Deduction for loans is available only in following cases:
1. Home loan
Deduction under head house property. For principal amount under section 80C and for interest as deduction from rental income, if there is any rental income or as loss if no rental income.
Deduction for interest will be maximum Rs. 1,50,000 for interest and Rs. 1,00,000 under 80C for principal amount per annum.
2. Education loan
If loan is taken from any higher education from any scheduled bank then deduction is available under section 80E for the full interest paid on that loan. However there is no deduction for the principal amount.
The details have not been discussed here as the loan given by you to your brother pertains to personal loan and it does not qualify for any kind of deduction under the Income Tax Act anywhere.
As a matter of tax planning you can charge interest from your brother for the loan given which he can claim as financial expense in his business and you can show the interest income as your income from other sources. But it will be a taxable income which you need to plan before you do so.
I advised as such because if you fall in tax bracket of 10% or 20%, then you will pay tax @10% or 20% but your brother will save 30.9% tax by claiming interest as expense from his business. There will be a saving of 10% or @20% savings in tax as per the tax bracket you fall in.
This will be purely based on your mutual understanding between you and your brother that you want to charge interest or not. But it is totally legal and genuine to do so. If you charge interest then make sure it is not excessive as compared to the market rate of interest.
In the end it is you who has to decide which option is better for you. Best of luck.