DEEMED DIVIDEND

Tax queries 601 views 7 replies

A company has 2 shareholders and both hold 50 % shares of the company. If company advances loan to grandson/son of one of the shareholder, will it attract section 2(22) (e)?

Replies (7)

A company has 2 shareholders and both hold 50 % shares of the company. If company advances loan to grandson/son of one of the shareholder, will it attract section 2(22) (e)?


 

Yeah. it attracts section 2(22) (e).

Coz see the words used in the defination. it is clearly written that
 "any payment by any such company on behalf, or for the individual benefit, of any such shareholder"

So payment made to son or grand son is also included fot the purpose of Deemed Dividend.

actually the payment is to be made to a firm in which shareholder's grandson is proprietor. where there is any  individual benefit of shareholder?

pls. reply

I think it is not treated ad Deemed Dividend. Even in the section it is writen that paymnet to any concern in which such shareholder is a member or a partner and in which he has a substantial interest. And even as per explanation3 (b) Which defines Substantial interest as "a person shall be deemed to have a substantial interest in a concern, other than a company, if he is, at any time during the previous year, beneficially entitled to not less than twenty per cent of the income of such concern " So it is not covered within that.

And even i had earier said that "any payment by any such company on behalf, or for the individual benefit, of any such shareholder" We can argue that payment made to prop. in which grand son is owner shall not be consider as for the individual benifit of such share holder.

Deemed dividend is applicble only for Closely held companies... I Dont think this case ll attract deemed Dividend.....

sir co. is a private limited company i.e. closely held


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
12 June 2026
Accounts & Taxation Executive

Winshine Financial Services

Mumbai

CA Inter

View Details
Company
ARTICLESHIP 31 May 2026
Article Assistant

KPRS And Associates

New Delhi

CA Inter

View Details
Company
Featured 26 May 2026
Account Executive

SMJ global advisors pvt ltd

New Delhi

B.Com

View Details
Company
26 May 2026
Audit executive

vdsr & co LLP

Chennai

CA Inter

View Details
Company
22 May 2026
Sr. Financial Analyst - Consolidation

Search Synergy

Mumbai

CA

View Details
Company
01 June 2026
Audit, Taxation & Compliance Executive

R P S K & Associates

Nashik

CA Inter

View Details
Company
26 May 2026
Education Content Creator

Adyayam Education LLP

Bengaluru

CA Foundation

View Details
Company
19 May 2026
Fundraising Expert

MentorsWorld Ventures Private Limited

Ahmedabad

Others

View Details