Deemed dividend on interst paid on directors loan
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
31 August 2010
Dear Experts,
A Pvt Ltd Co has paid interest on loan given by the director.
So my query is, whether the interst paid is allowed ? And secondly whether deemed dividend is applicable, even if the Pvt Co has not paid any dividend in that previous year.
Thnx in advance.
A Pvt Ltd Co has paid interest on loan given by the director.
So my query is, whether the interst paid is allowed ? And secondly whether deemed dividend is applicable, even if the Pvt Co has not paid any dividend in that previous year.
Thnx in advance.
31 August 2010
Deemed dividend Sec 2(22)(e) is applicable when loan is given to shareholders holding 10% or more shares. In your case Pvt Ltd company has taken loan from directors and paid interest so deemed dividend not applicable and expense will be allowed in the hands of the company.
31 August 2010
https://www.caclubindia.com/articles/details.asp?mod_id=6121
Also check above article for detail knowledge of deemed dividend provision.
Also check above article for detail knowledge of deemed dividend provision.
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