Interest on loan provided by the directors of company.
This query is : Resolved
26 April 2013
Can anybody suggest me about compliance regarding the interest to directors on the loan provided by them. Do we require to pay any interest to directors of the company on the loan provided by them? what compliance should be taken into consideration.?
26 April 2013
You can provide interest if you want to there is no compulsion on the same.
However if you are making payment following compliance is required to be taken care of
(1) Section 40A(2)(b) :-
The rate of interest should not be higher than the market rate currently prevailing.
(2) Board Resolution is required to be passed for the payment towards interest and it had to be approved in meeting.
(3) Disclosure requirement under AS - 18, 269 SS / 269T , 40A(2)(b) and CARO Reporting (if Applicable)
However if you are making payment following compliance is required to be taken care of
(1) Section 40A(2)(b) :-
The rate of interest should not be higher than the market rate currently prevailing.
(2) Board Resolution is required to be passed for the payment towards interest and it had to be approved in meeting.
(3) Disclosure requirement under AS - 18, 269 SS / 269T , 40A(2)(b) and CARO Reporting (if Applicable)
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
- GST Audit whether Govt Companies are exempt?
- PTRC Show Cause Notice on Email
- Accounting treatment of AMC alongwith the purchase of Laptop
- Unable to File TDS Q2 Return – New TRACES Portal Error
- Not ordinarily resident having partnership income in India and salary in USA is any form to filed be
- Transfer of Physical Stock Between Two Proprietorship Concerns
- Issuing of delivery challan by seller of goods
- Taxation of crypto futures in India Fy 2026- 2027
- GST Treatment of Purchases with GST Paid where Outward Supplies of Manufactured CattleFeed Exempt
- MSME disclosure and disallowance
- Condonation Request sec 119(2) b -Enhancement Limit of Leave Exemption prior to AY 2023
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
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
