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Conversion of loan into equity

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(Querist)
13 October 2009 Sir,Whether conversion of loan into equity given to a 100% subsidiary attracts any liability /penalty under any Section of Income Tax Act, 1961? Please guide.
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CA. B.SRINIVASULU

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CA. B.SRINIVASULU (Expert)
13 October 2009 As per income no penalty is leviable. However you should have written communication from holding to subsidiary. Section 372A of the companies act has to be adhered to.
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CA CHINTAN AJMERA

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CA CHINTAN AJMERA (Expert)
13 October 2009 Agree with expert
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Sreedhar Atchutuni ACA,GradCWA

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Sreedhar Atchutuni ACA,GradCWA (Expert)
14 October 2009 Agree with experts
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CA Amar Kant Choudhary

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CA Amar Kant Choudhary (Querist)
15 October 2009 Thanks to all of you for precious & valuable advice.

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