Deemed Dividend u/s 2(22)
This query is : Resolved
04 August 2010
Hi all
Loan given to a partnership firm by a private ltd. company in which one of the director is also a partner of the firm, will it amount to deemed dividend
please advise its urgent
Loan given to a partnership firm by a private ltd. company in which one of the director is also a partner of the firm, will it amount to deemed dividend
please advise its urgent
04 August 2010
2(22)(e) could be attracted if the shareholder holds more than 10% in the company and more than 20% in the firm.
Message likes :
1 times
04 August 2010
Section 2(22)(e)
"any payment by a company, not being a company in which the public are substantially interested, of any sum (whether as representing a part of the assets of the company or otherwise) [made after the 31st day of May, 1987, by way of advance or loan to a shareholder, being a person who is the beneficial owner of shares (not being shares entitled to a fixed rate of dividend whether with or without a right to participate in profits) holding not less than ten percent of the voting power, or to any concern in which such shareholder is a member or a partner and in which he has a substantial interest (hereafter in this clause referred to as said concern)] or any payment by any such company on behalf, or for the individual benefit, of any such shareholder, to the extent to which the company in either case possesses accumulated profits;"
As per Explanation 3(b) to Section 2(22) a person shall be deemed to have a substantial interest in a concern, other than a company, if he is, at any time during the previous year, beneficially entitled to not less than twenty percent of the income of such concern
yes , amount will be deemed dividend to the extent of accumulated profit of company if partner has at any time not less 20% share in firm. Read above definatin to any concern in which such shareholder is member or a partner.
"any payment by a company, not being a company in which the public are substantially interested, of any sum (whether as representing a part of the assets of the company or otherwise) [made after the 31st day of May, 1987, by way of advance or loan to a shareholder, being a person who is the beneficial owner of shares (not being shares entitled to a fixed rate of dividend whether with or without a right to participate in profits) holding not less than ten percent of the voting power, or to any concern in which such shareholder is a member or a partner and in which he has a substantial interest (hereafter in this clause referred to as said concern)] or any payment by any such company on behalf, or for the individual benefit, of any such shareholder, to the extent to which the company in either case possesses accumulated profits;"
As per Explanation 3(b) to Section 2(22) a person shall be deemed to have a substantial interest in a concern, other than a company, if he is, at any time during the previous year, beneficially entitled to not less than twenty percent of the income of such concern
yes , amount will be deemed dividend to the extent of accumulated profit of company if partner has at any time not less 20% share in firm. Read above definatin to any concern in which such shareholder is member or a partner.
Message likes :
1 times
04 August 2010
https://www.caclubindia.com/articles/deemed-dividend-section-2-22-e-of-income-tax-act-1961-6121.asp
You can also check above article for details.
You can also check above article for details.
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- About TDS & Income Tax
- Scrutiny and reopening of past returns
- Pass word to open justification report for Q1 for FY 2026-27
- Section 194JA & JB Income which ITR Form to use
- PPF interest-As Exempt Income disclosure
- Type of Capital Gain
- F & O PROFIT REPORTING FOR AY 2026-27
- Booth for sales promotion
- Difference in GSTR3B system generated which is correct and actual Payment it asks
- GST ON TRAVELLING BILLS
- TDS on Rent received on redevelopment of building
- Tax on Deemed Capital Gain
- Indian IT Portal issue in computing tax as per UK-India DTAA
- Capital Gains on sale of residential flat
- Upload Level ValidationITR3Category of Defect B/D
- PF Taxable Income
- Clarification on Tax Audit Applicability and Reporting of F&O Transactions in ITR-3
- Interest credited in FY2025-2026 & TDS therein by EPFO does not reflect in AIS or Form 26AS
- 44ad eligble money lending interest
- Taxation in the hands of Landowner under JDA
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
