Loan from a NRI to a private limited co. through the Directo

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 March 2010 Can a NRI give loan to a private company through the director of the company? The NRI has no official relation but the well-wisher of the company, giving the loan to the personal A/c of the director of the company and the director introduces the loan to the company. The company similarly refunded back the loan to that NRI through that director during the year. Note that the private company is not a NBFC company.

So, whether the above transaction is right or wrong?

If right ok

If wrong what is the correct procedure to take the loan.

CA Shiv

CA Shiv (Expert)
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30 March 2010 Welll it not wrong in doing that. But its difficult to convince ITO if assessment is there. the case is simple like director is giving loan to company... NRI is not involved with the company directly.
If NRI really wants to help the company, than ask him to have a NRE account in national bank and than transfer loan directly from the bank account. Dont involve Director directly...
If NRI is really a well wisher than i hope tht it will be an Interest free loan..

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