If a director has taken a loan from a private limited company, can the company convert this loan amount into deemed dividend u/s 2(22)E ?
Any resolution to be passed before this action?
Thanks
Mihir (Wealth Manager) (5293 Points)
14 September 2011If a director has taken a loan from a private limited company, can the company convert this loan amount into deemed dividend u/s 2(22)E ?
Any resolution to be passed before this action?
Thanks
C.A SHASHANK GOYAL
(Chartered Accountant)
(362 Points)
Replied 14 September 2011
Hi , Provision of section 2(22)(e) of income tax act will only be applicable if that director hold 10% for more of equity shares of the company and for the loan to directors you need to refer to section 295 of companies act 1956 but if it is a private company it will not be applicable .
valji
(Accounts manager-MBA)
(2150 Points)
Replied 14 September 2011
as per my knowledge sec 295 applicable to pvt ltd company also it is treate deem dividended
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