Deemed dividend

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Nithija (Querist)
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11 June 2019 Dear Experts,
If a Director of a Private Limited Company gets Loan of a sum of Rs 20,00,000/- and has neither given any interest nor repayment.....Is it Considered as Deemed dividend and will it have any tax implications, If so is it taxable in the hands of the Director or in the hands of Company??

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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11 June 2019 Yes, it's considered as deemed dividend and taxable in the hands of director.
Dividend taxation u/s 2(22)(e) shall be taxable in the hands of shareholder rather than the company.

Nithija

Nithija (Querist)
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11 June 2019 whether the Loan given during that Year is only liable to tax or the Loans given previously outstanding in the Balance Sheet is also liable to tax??

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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11 June 2019 The director is liable for tax in the year of receipt of the amount.

Nithija

Nithija (Querist)
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11 June 2019 Thank you sir !!
One More doubt If the director has'nt paid tax in the year of receipt and the Income Tax officer has sent a notice after 3 years...what can we do?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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11 June 2019 Reply to the notice about director's liability.

Nithija

Nithija (Querist)
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11 June 2019 As per the Balance Sheet of the Company it has disclosed that "Loan given to director: for 20 L ( Although the same was given 2 years stands in the balance sheet for 2 yrs) and the Income tax Officer has given a notice in the current year that we the Director should pay Tax on the deemed Dividend?

Nithija

Nithija (Querist)
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11 June 2019 Is there any way he can escape such liability saying that it was given 2 years back and the income tax officer couldn't charge it to tax this year?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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12 June 2019 No escape pay tax, income tax officer has power to issue notice up to 6 years. Director has to pay tax.

Nithija

Nithija (Querist)
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12 June 2019 THANK YOU SO MUCH SIR!! YOUR REPLY MEANT A LOT

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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12 June 2019 Welcome......................

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