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Cash Loan to Emoloyee
To what amount can the employer give loan to his employee in cash.
Replies (6)
Quick Summary
As per industry norms, it is generally one month salary.
What about if we want to give more than one month salary.Is it disallowed under income tax or we can give upto Rs.2,00,000.
How does income tax act comes into the picture.?
Rs.2 lacs is disallowed under Income tax act...
Rs.2 lacs is disallowed under Income tax act...
under which section.
Loan to employees is not an expenditure.so it can't be claimed as expenses and no disallowance it comes to picture because you are not able to claim it.loan may gave at any amount to employees but loan by hard cash is possible only upto 20000.more than that it will breach of section 269ss and 100% penalty applicable for that loan.
When offering a cash loan to an employee, it's important to consider both company policy and financial regulations. You might want to explore options through Kotak Mahindra Bank, which provides various employee loan solutions. Kotak's tailored loan products can simplify the process, ensuring compliance and offering competitive interest rates. Additionally, utilizing a reputable bank like Kotak Mahindra can provide peace of mind for both the employer and employee, as the terms and repayment conditions are transparent and well-managed. Be sure to consult with your HR department and financial advisor to structure the loan appropriately.
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