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RELATED PARTY PAYMENTS

Articleship 612 views 2 replies

CA.kaya

Chartered accountant

3990 Points Joined April 2009

HELLO

in 3cd report we got to report the payments made to related party .the related party mean those who have substantial interest in the company/firm. so whats the scope of substantial interest. what is the yard stick to decide whether a person have substantial interest or not

Replies (2)

prateek

CA Final

355 Points Joined October 2008

its 20% or more voting power in d company of firm

Guest

Substantial Interest has been defined u/s 13 of Income tax act.

An individual is deemed to have a substantial interst if he individually or along with his relatives beneficially holds equity shares carrying not less 20% of the voting power in the case of company or is entitled to not less than 20% of the profits , in the concern, other than a company, at any time during the previuos year

For this purpose realtive means husband, wife, brother, sisiter or any lineal ascendant or descendant of that individual.

hope its clear now