Valuation of interest free loans
This query is : Resolved
13 February 2014
Kindly guide me with an example as to how to calculate interest free loans provided by the employer to the employee.
What should be the rate of interest charged for the same, and how is it treated in calculating the TDS of employee for the month of March'14
Thanks
Swati
What should be the rate of interest charged for the same, and how is it treated in calculating the TDS of employee for the month of March'14
Thanks
Swati
13 February 2014
It is benchmarked against sbi lending rate. Every year this rate is notified for income tax purposes.
the interest chargeable at sbi rate less any interest charged by the employer is added to the perquisites.
the interest chargeable at sbi rate less any interest charged by the employer is added to the perquisites.
Message likes :
1 times
13 February 2014
Thanks a lot..
Please also let me know sbi lending rate for AY 2014-15
Please also let me know sbi lending rate for AY 2014-15
13 February 2014
I agree with Nikhil Kaushik.
In your case, since it is interest free. Perquisite would be calculated directly on the SBI lending rate existing as on 1st April of the previous year.
One important point to be noted, in case of any repayments, calculation of interest has to be done on a monthly basis. Ie the balance of loan outstanding as on the last day of a particular month should be considered and then calculations should be done... hope that resolves your query....
In your case, since it is interest free. Perquisite would be calculated directly on the SBI lending rate existing as on 1st April of the previous year.
One important point to be noted, in case of any repayments, calculation of interest has to be done on a monthly basis. Ie the balance of loan outstanding as on the last day of a particular month should be considered and then calculations should be done... hope that resolves your query....
Message likes :
1 times
14 February 2014
Thanks Nikhil & Anand for the valuable inputs.
Please also guide me as what is the rate of interest of SBI as on 01.04.2013. I am not finding it correctly anywhere.
Please also guide me as what is the rate of interest of SBI as on 01.04.2013. I am not finding it correctly anywhere.
14 February 2014
Dear Swati,
please refer www.caclubindia.com/forum/sbi-interest-rate-1-april-2013-281641.asp#.Uv3Vvc4kQp8
if the loan is for general purpose, you need to apply 14.70%
please refer www.caclubindia.com/forum/sbi-interest-rate-1-april-2013-281641.asp#.Uv3Vvc4kQp8
if the loan is for general purpose, you need to apply 14.70%
14 February 2014
By the way Anand...Hi..how are you? I didnt knw you joined Piramal after EY.
17 February 2014
If the loan is for medical purpose for the purpose other than the medical treatments mention in Rule 3A, then what rate of interest to be charged.
17 February 2014
well then it should be covered under demand loan only 14.70% p.a
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Applicability
- Is Aadhar PAN linking required for opening bank account?
- Where to show the RCM on Rent paid to unregistered landlord
- CPC Processing IT Return for AY 2023-24 without recognizing the Taxation Option under New Regime
- Application of 115BAC
- RCM - commercial rent paid to URP under GST
- Offsetting interest income against derivative trading losses
- TDS NUMBER SURRENDER
- GSTR-3B - Do I file nil when there is no sale but I've bought raw materials
- Legal heir raised refund , but refund issued to the closed account of deceased.
- Whether still royalty
- 20% OF DEMAND PAYMENT IN APPEAL
- Issue of gst e invoice
- Interchangeable words in accounts
- Adjusted profit/Loss in the case of LLP and Pvt. Ltd.company
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
- Regarding Resignation by Auditor from Pvt. Ltd.
Trending Online Classes
-
Excel Mastery Program
CA Rishabh Pugalia
CAclubindia
