Loan from directors
This query is : Resolved
29 July 2011
Dear sir,
I m working in a pvt ltd comp and our directors have taken a loan from hdfc bank and same amt given to comp as a loan.
comp also pay intt on such loan to directors after TDS.
In ITR of directors such interest income will be shown as income from other sources
now the issue is intt which is paid by directors to hdfc bank is deductable as exps or not.
pls guide me
I m working in a pvt ltd comp and our directors have taken a loan from hdfc bank and same amt given to comp as a loan.
comp also pay intt on such loan to directors after TDS.
In ITR of directors such interest income will be shown as income from other sources
now the issue is intt which is paid by directors to hdfc bank is deductable as exps or not.
pls guide me
29 July 2011
Interest paid can be claimed as an expenditure under section 57(iii) of the Income tax Act,1961.
But this is a clear violation of section 58A of the Companies Act,1956 since the money invested is not the director's own money but borrowed from bank which is an offence punishable with fine.
But this is a clear violation of section 58A of the Companies Act,1956 since the money invested is not the director's own money but borrowed from bank which is an offence punishable with fine.
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