intt on loan to a director
This query is : Resolved
27 November 2008
Can A Pvt. Ltd. Co. earning few profits give intt free loan to its directors?
Is it necessary to charge interest on loan given to directors?
Please answer
Thanks
Is it necessary to charge interest on loan given to directors?
Please answer
Thanks
27 November 2008
No. section 2(22)(e) of the income tax act,1961 attracts.
27 November 2008
Provided the director has substantial interest in the company.
27 November 2008
If the loan is given out of borrowed funds ......interest on the corresponding loan may be disllowed on the ground that inteest not paid for the purpose of business
it may be treated as deemed dividend in tha hands of directore u/ 2(22)(e) if the conditions are fulfulled
it may be treated as deemed dividend in tha hands of directore u/ 2(22)(e) if the conditions are fulfulled
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