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Director's EMI Paid By a Company

18 April 2020

If a loan is taken by a director and EMI is paid by company, then how the EMI paid is treated in the books of a company,does it attract any tax?

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5 Replies

Eswar Reddy S (CFO- at NHTF) (58213 Points)
Replied 18 April 2020

No.It will not attract any tax.

EMI paid on behalf of Director will be considered as loan to Director..

2 Like

RAJA P M ("Do the Right Thing...!!!") (127127 Points)
Replied 18 April 2020

Yes... I agreed to Mr Eswar..

Director's individual payments accountabile into director's loan account (as current account).

It's not taxable into company's books and also it's not a expenditure in company's books..

1 Like

SUSHANT BIDAYE (578 Points)
Replied 18 April 2020

Will it nit be considered as perquities and company will have to deduct TDs on it.

if it is loan, then also interest free loan and hence tax implications.

My views

Shivam RC (Student) (23683 Points)
Replied 18 April 2020

The Loan is taken from a Bank/Financial Institution by the Director in his name and the EMI is being paid by the Company right ?

SUSHANT BIDAYE (578 Points)
Replied 18 April 2020

Just an addition to my earlier answer.

emi paid will be debited to directors remuneration or loan to director depending on the arrangement.

tax implications , I have replied earlier

1 Like