Advance to directors
This query is : Resolved
14 August 2013
sir .... i want to the treatment of advance given to directors on account of exps by pvt co in cash (exceeds Rs.20000 ) ... what will the treatment of that as per it act & and co act ..... ????
14 August 2013
as per it act if given in cash still it will not be disallowed as it is capital loan amount and will be later paid back by director.
as per co act it will be adjusted in directors loan a/c.
as per co act it will be adjusted in directors loan a/c.
14 August 2013
sir ... if it is given to directors for incurring exps ... for attending meetings &some other business exps. then ?
14 August 2013
then it is not loan it is advance for business purpose and not personal loan, even for reimbursement of exp for business purpose it will not be personal loan.
14 August 2013
1)it can be accounted as imprest advance
2)it will be okay if you have given amount as advance..but while booking expenditure if you pass expenditure in a single day more than 20000 it will be disallowed 40A(3)
2)it will be okay if you have given amount as advance..but while booking expenditure if you pass expenditure in a single day more than 20000 it will be disallowed 40A(3)
14 August 2013
Advance to director and later repaid is not an exp and hence sec 40A(3) is not attractable.
01 September 2014
There will be violation of section 2(22)(e) of the Income tax act and it will be deemed dividend and taxable in the hand of directors
02 September 2014
Advance given to meet expences may not create any problem with company act
Advance given to meet expences may not create any problem with company act
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