intt. free Loans given & loans taken from director
This query is : Resolved
Ramkrishna
(Querist)
02 July 2009
Hi
Can a company arrange interest free loans from directors, his realtives and freinds.
what are the legalities to be maintained?
what are the circumstances of its denial by IT department.
Thanks
Can a company arrange interest free loans from directors, his realtives and freinds.
what are the legalities to be maintained?
what are the circumstances of its denial by IT department.
Thanks
CA. B.SRINIVASULU
(Expert)
02 July 2009
When you collect interest free loans from directors, his friends and relatives from the point of view of company there is no problem. But the ito will include deemed interest income which has escaped assesment and can tax accordingly in individual return. And also it leads to unnecessary suspicion why interest free loan is granted to the company and what are the indirect benefits they are eligible.
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