Loans to shareholder
Querist : Anonymous
M/s. X Pvt.Ltd. is a shareholder of M/s.Y Pvt.ltd.
Now, can Y.Pvt.ltd. can lend loan to the shareholder M/s.X Pvt.Ltd.
What is the consequences, if loan given.
Please advice.
Check the applicability of Section 2(22)(e) in this trasaction as per Income Tax Act.
In my view it will not be applicable but do double check.
But.. Section 2(22)(e) of Income Tax Act will come into picture in case where the shareholding is 10 % or more. In those cases it will be treated as deemed dividend.
Querist : Anonymous
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