Unsecured loan accounts
This query is : Resolved
31 July 2013
Unsecured Loans 5 lakh only opening balance and no fresh accpetance or repayment during the year hence closing balance also same as 5 Lakh
Interest on this is paid at 5000 per month in cash by debit to interest account in Profit and loss account every month yearly 60000,
Interest is paid in cash every month without passing any journal entry in loan account ,direct interest account is debited for amount of interest paid monthly
Now when doing 44AB Audit for traders following accrual basis of accounting is this correct or it involves voilations of any provision of income tax act or any provison
Do we have to report this anywhere ?
Interest on this is paid at 5000 per month in cash by debit to interest account in Profit and loss account every month yearly 60000,
Interest is paid in cash every month without passing any journal entry in loan account ,direct interest account is debited for amount of interest paid monthly
Now when doing 44AB Audit for traders following accrual basis of accounting is this correct or it involves voilations of any provision of income tax act or any provison
Do we have to report this anywhere ?
31 July 2013
Section 269T restricts repayment of deposit or loan in cash.
.
It does not, as such, restrict payment of interest in cash. Cash payment of expenditure comes under the per view of Section 40A(3).
.
It is still advisable to pay the interest also by an a/c payee cheque as some experts may opine that interest also becomes part of loan.
.
.
It does not, as such, restrict payment of interest in cash. Cash payment of expenditure comes under the per view of Section 40A(3).
.
It is still advisable to pay the interest also by an a/c payee cheque as some experts may opine that interest also becomes part of loan.
.
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31 July 2013
Interest payment is expenditure and not loan repayment, if such payment is made in cash directly debiting to profit and loss account without effecting loan account than how does it effect 269SS or 269T ?
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