Deemed dividend

22 March 2019
If a private company gives loan to its director who has substantial interest in company and company is in loss, then such loans can be considered as deemed dividend??
And whether DDT is applicable on such loan?

B.Chackrapani Warrier (Expert)
22 March 2019
Loss mentioned in query, is it current year loss or 'accumulated loss'. Please see
section 2(22)(e) of the income tax act,1961.

Amit k (Querist)
22 March 2019
It is Current year loss

B.Chackrapani Warrier (Expert)
23 March 2019
O.K, then if the 'balance in profit and loss account' under the head 'Reserves &
Surplus' shows a credit balance (accumulated profits), then the loan to Director
attracts 2(22)(e) to the extend of loan or accumulated profits whichever is less.

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