PGBP-1.loan from relative of director,2.unrecognised PF

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CA Vijeta Verma (Querist)
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13 August 2010 Q1) is the loan taken from the relative of director(already debited in P&L A/c) is allowable expenditure for the purpose of PGBP income??
Q2)is employees contribution towards unrecognised PF & gratuity fund which is credited by employer to employees' A/c before due date is allowable expenditure??

in both cases if YES the under which section?as per vk singhania both are permitted..

Ca Aashish Upadhyay

Ca Aashish Upadhyay (Expert)
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13 August 2010 Dear Sandhya

ANS-1 I would start with BIG" NO " because loan is not a revenue expenditure but a capital item. So any payment of Loan would not be a part of expenditure. However if the Loan is in accordance with sections 269S and T(as the case may be) than Interest paid or payable @ 12% would be an allowable expenditures.

ans -2 Only the employers contribution to PF as per the Provident Fund act is allowable expenditure.