Loan to directors

TDS 115 views 3 replies

Hi!

What are the implications of lending money by an NBFC to it's MD? 

Replies (3)
2(22)(e) will attract in the hands of MD

Sir, 

Thank you for the response.

But as per various Court decisions loan in the normal course of business will not attract section 2(22)(e). 

It may be taxed as Parquisit in the hands of the director if Given at an interest rate lower than the market rate, generally 12%.

Is there any restriction under new companies act?

there is no any restriction under section 185 of companies act.


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