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About deemed divided

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(Querist)
15 October 2012 if a company gives a loan/ advance to a propritership firm then what should we do in that case by applying the provision of deemed dividend
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prasad

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prasad (Expert)
15 October 2012 Firstly me assuming u as an auditor of the company.

Secondly, the proprietory firm is the one firm whose name is registered in the register kept U/s 301. i,e,, related party.

As an auditor the related party transactions are to be reported in annual reports of the company.

If u r tax consultant, then ask ur assessee to pay dividend tax on the amount of laon or advance given to such party.
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Deepak Goel

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Deepak Goel (Expert)
20 October 2012 You have to pay Dividend Tax on which you have given loan to a related party to the extent of Reserve & surplus




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