Loan
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
26 May 2010
Hi Friends
I have urgent query about Loan. One of the company employees requesting for personal loan from company, presently he is drawing more then one lakhs. Please tell as per law (as per IT Dept and Company Law)can company allow loans to employee? If it ok then what is the limit? Can we charge interest? If employee unable to reimburse loan then how to recollect to them?
I have urgent query about Loan. One of the company employees requesting for personal loan from company, presently he is drawing more then one lakhs. Please tell as per law (as per IT Dept and Company Law)can company allow loans to employee? If it ok then what is the limit? Can we charge interest? If employee unable to reimburse loan then how to recollect to them?
26 May 2010
Loans can be given to employees who are not directors. There is no specific limit under the law. Rate of interest and other terms may be decided by the company as per its internal policies. For re-collecting as well, the company may have its own policies.
Querist : Anonymous
Querist :
Anonymous
(Querist)
27 May 2010
Hi Sir
Thank you, is this taxable to employee? or Company?
Thank you, is this taxable to employee? or Company?
27 May 2010
The loan would be treated as a loan only and not a perq. Hence, the question of taxability on the company or the employee does not arise.
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