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)
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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)
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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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