Taxation of interest free loan availed by firm

Sec. 28 IT act.... f a firm receives an interest-free loan, the interest that would have been charged (if the loan were at market rates) could potentially be treated as part of the firm's income in certain situations. This is because the amount saved on interest payments can be considered a benefit or a perquisite received by the firm, which could be treated as income.

Sec. 56(2)(vi) IT act..... f a firm or company receives a loan from a related party or a non-business entity, and the loan is interest-free or the interest rate is significantly lower than the market rate, the difference between the interest that would have been charged at the market rate and the actual interest charged (if any) may be treated as income under Section 56(2)(vi) as income from other sources.