Deemed dividend
This query is : Resolved
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?
And whether DDT is applicable on such loan?
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.
section 2(22)(e) of the income tax act,1961.
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.
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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