Applicability of tds

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Navdeep Jangra (Querist)
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24 January 2014 Dear all,

A company is providing Interest free loan to its employees and a certain percentage of amount is deduced from salary of employees every month.

Now my question is
1)Interest free loan amounts to a taxable perquisites in the hands of employee.

2)I am confused about the nature of amount so provided . is this a loan or an advance salary .

if it is loan than same shall be returned back to the company by the employee not deducted from salary.

if it is advance salary than company should deduct TDS .

moreover a single head is created for both loan and advance

@VaibhavJ

@VaibhavJ (Expert)
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24 January 2014 Hi,

1 - Interest free loan is taxble as perquisite

2 - It is loan if amt is recovered in more than 1 installments & else it is salary advance.

Thx

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Navdeep Jangra

Navdeep Jangra (Querist)
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24 January 2014 Thanks a lot sir ,

plz tell me the rate of interest which should i take to calculate value of perquisite

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@VaibhavJ

@VaibhavJ (Expert)
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24 January 2014 Pl refer: http://www.hinote.in/loan-provided-to-employees-perquisite-calculation-part-ii

Thx

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