Borrowings between a private limited company and huf

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Shiv Kumar Rathi (Querist)

01 May 2013 Dear All,

I need ti understand one thing, we have two organization one is a Private Limited and another one is HUF proprietorship.

In Private Limited firm, my father and my younger brother are the directors. In the HUF proprietorship my father is the Karta and proprietor.

We do a lot of borrowings between the two firm from private Limited to HUF proprietorship and vice versa through banck transfers. Are we doing any violation, do we need to follow interest receivable and payable transactions?

Please clarify my doubt...

Anil Sankar V

Anil Sankar V (Expert)

01 May 2013 Are they holding controlling interest in Pvt. Limited company? if Yes, the consequences vary( depending on the %)

Shiv Kumar Rathi

Shiv Kumar Rathi (Querist)

01 May 2013 No, controlling interest, some times the private needs some fund we take from HUF and vice versa. how can we legalise the borrowings can charge interest receivable and payable

Anil Sankar V

Anil Sankar V (Expert)

01 May 2013 Legalise borrowings in the form of unsecured loans and to make entries for interest. if necessary deduct TDS u/s 194A.

Shiv Kumar Rathi

Shiv Kumar Rathi (Querist)

01 May 2013 So do we need to charge interest and deduct interest on the final square off value or we have to charge interest and TDS separately from both the organization.

Can you please call me at 91-9545556959 or if you can revert back with your mobile No.

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