Taxability of interest recieved on unsecured loans advanced.

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Querist : Anonymous

Querist : Anonymous (Querist)

07 February 2013 Dear Sir

Please enlighten me on the following Issue:-

Taxability in the hands of shareholder advancing an unsecured loan to its company being in nature of private limited company.

Shall it be treated a s income u/h business and profesion or shal it be treated as income u/h other sources?

Please opine

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

07 February 2013 Advancing an unsecured loan to a pvt ltd company by a shareholder is not treated as any income. However, interest on such loan has to be considered under the head Income from Other Sources.
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Querist : Anonymous

Querist : Anonymous (Querist)

08 February 2013 If the sharehoder is also a director then also shall the treatment be income u/h business profession or shall it be income from other sources?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

08 February 2013 The director's interest income will also be considered under the head IFOS.
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Director carries business on behalf of a company. In "Individual" capacity he may receive remuneration. However, if remuneration is not in the form of salary , it can be treated as professional income U/s 194J.
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Querist : Anonymous

Querist : Anonymous (Querist)

08 February 2013 Thank you Sir

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