Share Application Money
This query is : Resolved
Anshul Singhvi
(Querist)
28 November 2009
Case: ABC (P) Ltd is showing share apllication money under the head unsecured loan
Qurey:
1.Whether company can show amt. of share application money received under the head unsecured loan and if yes ,then what will be he impact as per income tax act and companies act ?
Qurey:
1.Whether company can show amt. of share application money received under the head unsecured loan and if yes ,then what will be he impact as per income tax act and companies act ?
Ram Avtar Singh
(Expert)
28 November 2009
you can not treat as share application money until you taken in unsecured loan.
Its to be transfer in share application money and issued share to that party.
If the conditions aforesaid have not been complied with on the expiry of one hundred and twenty days after the first issue of the prospectus, all moneys received from applicants for shares shall be forthwith repaid to them without interest; and if any such money is not so repaid within one hundred and thirty days after the issue of the prospectus, the directors of the company shall be jointly and severally liable to repay that money with interest at the rate of six per cent per annum from the expiry of the one hundred and thirtieth day:
Its to be transfer in share application money and issued share to that party.
If the conditions aforesaid have not been complied with on the expiry of one hundred and twenty days after the first issue of the prospectus, all moneys received from applicants for shares shall be forthwith repaid to them without interest; and if any such money is not so repaid within one hundred and thirty days after the issue of the prospectus, the directors of the company shall be jointly and severally liable to repay that money with interest at the rate of six per cent per annum from the expiry of the one hundred and thirtieth day:
Anshul Singhvi
(Querist)
28 November 2009
The question is whether we can show the amt. received from share application money under the head :Unsecured Loan"
Ram Avtar Singh
(Expert)
28 November 2009
No. you should entered in share application money. under capital a/c group
Anshul Singhvi
(Querist)
28 November 2009
As i know that the share applcation money must be shown between share capital and Reserve and Surplus head.If the company is showing the share application money in the head of unsecured loan then what will be the conseuquences?
UMA SHANKER SHARDA
(Expert)
29 November 2009
In Companies Act: If share application money is shown as unsecured loan by a pvt ltd co., provisions of sec. 58A shall be applicable. You then have to check, whether this application money was received from the person falling outside the purview of definition of deposit given in Companies (Acceptance of Deposit) Rules 1975, as amended.
In Income Tax: You have to show in 3CD annexure prepared U/s 269SS & if repaid than in 269T also. If share application money is in excess of Rs.20000/- per applicant, it is also be voilation of IT Act, if you classify it under unsecured loans.
In Income Tax: You have to show in 3CD annexure prepared U/s 269SS & if repaid than in 269T also. If share application money is in excess of Rs.20000/- per applicant, it is also be voilation of IT Act, if you classify it under unsecured loans.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- GST Audit whether Govt Companies are exempt?
- PTRC Show Cause Notice on Email
- Accounting treatment of AMC alongwith the purchase of Laptop
- Unable to File TDS Q2 Return – New TRACES Portal Error
- MSME disclosure and disallowance
- Taxation of crypto futures in India Fy 2026- 2027
- Not ordinarily resident having partnership income in India and salary in USA is any form to filed be
- GST Treatment of Purchases with GST Paid where Outward Supplies of Manufactured CattleFeed Exempt
- EPF ECR NEW RULES Sep 17th 2026
- Condonation Request sec 119(2) b -Enhancement Limit of Leave Exemption prior to AY 2023
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
