Consequences of accepting unsecured loan without interest

This query is : Open

CA BIREN SHAH (Querist)
Follow

26 June 2012 What will be the Consequences under Income tax act in the following sitution..

1. If a private limited company accept unsecured loan without interest and use it for the purpose of its business?

2.If a private limited company accept unsecured loan without interest and the same amount is transferred by giving loan to some other party without interest?

CA. SUDHARSAN K G

CA. SUDHARSAN K G (Expert)
Follow

26 June 2012 Unsecured Loans:

At the time of Assessment, the AO shall ask the indentity and confirmation for unsecured loans. It is because income may be shown as unsecured loans to evade tax.

The situation will be same in the two given situations for the receiver. There is a probable situation where the AO may disallow Interest Expense in the hands of lender for providing Interest free loan.

CA BIREN SHAH

CA BIREN SHAH (Querist)
Follow

27 June 2012 In case of 1....
can AO make addition in the income of assesse of whole unsecured loan accepted as it is accepted without interest?

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

Michael & Co.

CA K GIRIDHAR

Samruddhi Agrawal

MURALIKRISHNA EDDANAPUDI

Namita Fule

Subscribe Now

Consequences of accepting unsecured loan without interest

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

CA Final

GST CONSULTANT

Manager- Finance and Compliance

Accountant

GST CONSULTANCY

Senior Executive