Rate of interest allowed on unsecured loans

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15 Points Posted on 18 January 2021
what is the maximum rate of interest a trust can pay for unsecured loan taken by it?
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On 18 January 2021 at 13:32 Report
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This discussion clarifies that there's generally no legal restriction on the rate of interest an educational trust society can pay for an unsecured loan. However, if the lender is a related party, tax authorities may disallow any interest deemed excessive compared to market rates under Section 40A(2)(b).

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215 Points Posted on 18 January 2021
There is no such restriction for rate of interest....

you can pay any rate of interest...
But if lender is Related party then A.O may disallow excessive interest u/s 40A(2)(b)
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On 18 January 2021 at 15:32
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17269 Points Posted on 18 January 2021
Which type trust you are referring to !! Trust paying interest is uncommon !! please clarify
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On 18 January 2021 at 21:17
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15 Points Posted on 18 January 2021
I am asking for educational trust society
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On 18 January 2021 at 21:49
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Accountant
4533 Points Posted on 19 January 2021
There is no such restriction on payment of interest. but in case of relative party the excess interest in comparison to market will be disallowed
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On 19 January 2021 at 00:16
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Chartered Accountant
86505 Points Posted on 19 January 2021
You can pay interest as per your wish
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On 19 January 2021 at 04:04
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15 Points Posted on 19 January 2021
Thanks for the replies
1 Reply
On 19 January 2021 at 08:09
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Chartered Accountant
86505 Points Posted on 20 January 2021
Welcome....... My Pleasure.......
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On 20 January 2021 at 22:21
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Chartered Accountant
86505 Points Posted on 20 January 2021
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On 20 January 2021 at 22:21
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Accountant
4533 Points Posted on 20 January 2021
My pleasure
2 Reply
On 20 January 2021 at 22:25

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