22 April 2011
Dear Experts, A company "ABC Ltd" is shareholder (having 10% shareholding) of company "XYZ Pvt Ltd". Can "ABC" give interest free loan to company "XYZ". As far as I think from income tax point of view we can not give. If yes we can given then is there any section or case which I can refer to. Need clarification. Thanking you
25 April 2011
the only piont u have to keep in mind is that if ABC Ltd is having any borrowed money at its B/s than interest paid on such capital may be disallowed
I need some clarification further, is there any section or case law which says that loan given by shareholder (interest free) is allowable from income tax point of view.
Further, is there any shareholding limit for giving interest free loan.
CAclubindia
