loan to director of pvt ltd company

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rakesh sharma (Querist)
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01 October 2008
Is there any ceiling on amount of loan
which can be given by pvt Ltd company
to its director.The company is nither holding or subsidiary company of any public ltd company.

Will this loan amount will be considered as perquiste in personnel income of director under income tax law.

rakesh sharma

rakesh sharma (Querist)
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01 October 2008 121

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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01 October 2008 The loan amount will be treated as deemed dividend in the hands of the concerned director u/s 2(22)(e) of the income tax act,1961 subject to the other conditions mentioned therein.

Message likes : 1 times

CA.Tarun Maheshwari

CA.Tarun Maheshwari (Expert)
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01 October 2008 Loan to director by the private company can be given without any cieling.

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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02 October 2008 As the question is with reference to to IT Act,Mr. Warriors' view is correct in this context.

rakesh sharma

rakesh sharma (Querist)
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03 October 2008 A director of pvt ltd company requires urgent money say Rs. 20lac for some personal purposes. now he wants to withdraw the money from his company where he is major beneficial owner. The money to be withdrawn shall be repaid in due course of time say within one year.

What are the best options available to him
ensuring that
The relevent provsions of companies act & income tax are complied with.

Also ensuring that there is no additional income tax liablity in directors' personal income.

Regards

CMA Jitendra Singh

CMA Jitendra Singh (Expert)
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06 October 2008 Issue as an advance which can be said for business purpose (advance to buy land or property held by director etc) to protect from deemed provisions of IT Act

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