Deemed Dividend

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Querist : Anonymous

Querist : Anonymous (Querist)

12 July 2011 SUPPOSE WE HAVE GIVEN ADVANCES TO PROMOTERS AROUND RS 2 CRORE AND DEEMED DIVIDEND IS APPLICABLE CAN U PLEASE LET US KNOW HOW DO WE CALCULATE THE SAME AND WHAT IS THE TAX RATE FOR THE SAME.

THANKS

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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12 July 2011 These provisions are applicable for the companies in which public are not substantially interested.

If such an advance is made to a person beneficially holding 10% or more voting power in the company, the amount of loan advanced to him to the extent of accumulated profits in the company shall be deemed as dividend paid to him and will be taxable, to that extent, in his hands.

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