Deemed dividend
This query is : Resolved
23 February 2014
1) X is a private limited company.
2) The company gave loan to Y another private limited company.
3) X-company has 85% shareholding in Y (private limited company).
4) Whether the loan given by X-company to Y is deemed dividend or not?
5) If so, in whose hands the amount to be taxed?
2) The company gave loan to Y another private limited company.
3) X-company has 85% shareholding in Y (private limited company).
4) Whether the loan given by X-company to Y is deemed dividend or not?
5) If so, in whose hands the amount to be taxed?
23 February 2014
well for deemed dividend, loan should be given to someone who owns shares in your company. so normally loans given to subsidiary should not attract deemed dividend provided that no other shareholder of the company owns minimum shares required ie 10% of the holding company and 20% of the subsidiary. In such a case deemed dividend is taxed in the hands of such sharedholder.
In your case if the company itself owns the 85% of the subsidiary, no deemed dividend should trigger
In your case if the company itself owns the 85% of the subsidiary, no deemed dividend should trigger
23 February 2014
Thank you for the wonderful advice.
23 February 2014
you are welcome Rao.....
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