Intt. free loan

This query is : Resolved

suman (Querist)
Follow

01 November 2010 My co has granted 2 employee loan amounting 4.5 lakh each at nil rate of intt. repayable in 5 yrs . now i want to know that whether co can claim notional loss of intt.as expenditure on such loan. or to treat the notional intt on loan as part of salary given to those employee. pls reply soon that whether such notional loss of intt is an expenditure or not?

CA Navin Jain

CA Navin Jain (Expert)
Follow

01 November 2010 not cliam notional loss

ashok aggarwal

ashok aggarwal (Expert)
Follow

01 November 2010 hi
i am agree with ca navin jain and i say that we can not claim notionalloss nor we can make salary of employee who give intt. free loan
thanking you

Upgrade to CAclubindia Pro. Subscribe Now!

CA. Aryendra

CA. Aryendra (Expert)
Follow

01 November 2010 Yes agree with Mr. Naveen Notional loss can not be claimed

suman

suman (Querist)
Follow

01 November 2010 thanks for replying . but one moot question remained in my mind company has given loan to employee naturally for making them loyal to co can we claim the same u/s 37(1) of the income tax act