Interest free loan
This query is : Resolved
17 October 2012
Hi Experts,
If an employer is giving interest free loan to its employee and such loan is recoverable in 10 instalments. Whether the employee has to pay tax?
Pl advice.
Thanks
Prachi
If an employer is giving interest free loan to its employee and such loan is recoverable in 10 instalments. Whether the employee has to pay tax?
Pl advice.
Thanks
Prachi
17 October 2012
This is regarde as prequisites and valuation will be as under:-
•Find Out the Maximum outstanding monthly balance For each loan on the last day of each month.
•Find Out the rate of interest Charged by the SBI on that type of loan on the first day of relevant previous year
•Calculate interest on amounts given in (1)for the full financial year above @ rate of SBI as per (2) above and deducte interest recovered from the employee.
•The balance will be taxable as perquisites in hand of employee.
•Find Out the Maximum outstanding monthly balance For each loan on the last day of each month.
•Find Out the rate of interest Charged by the SBI on that type of loan on the first day of relevant previous year
•Calculate interest on amounts given in (1)for the full financial year above @ rate of SBI as per (2) above and deducte interest recovered from the employee.
•The balance will be taxable as perquisites in hand of employee.
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