Deemed dividend
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
19 November 2011
Dear sir,
One of my client taken loan from their pvt ltd co. where he was shareholder more than 10% substantial interest.
Please tell whether he is come under section 2(22)e deemed dividend.If yes than tell me how to calculate the liability & how to come out of these matter.
My client debit balance at the end of the year of Rs.75 lakh apprx. Firm Profit is Rs. 12.52 thousand. Share holding of my client is 25%.
Please answer me its very urgent.
One of my client taken loan from their pvt ltd co. where he was shareholder more than 10% substantial interest.
Please tell whether he is come under section 2(22)e deemed dividend.If yes than tell me how to calculate the liability & how to come out of these matter.
My client debit balance at the end of the year of Rs.75 lakh apprx. Firm Profit is Rs. 12.52 thousand. Share holding of my client is 25%.
Please answer me its very urgent.
CA PARAS BAFNA
(Expert)
22 November 2011
The liability of the client arises when the company is having accumulated profits. In a case where company has profits then to the extent the income is taxed under the head Income From other Sources in his hand.
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