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Acceptance of loan

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Sowmya.S.Balan

Paid Assistant

749 Points Joined December 2009

Dear Sir

in our case one proprietory firm to meet its financial problems accept loan from one of its employee (manager) by a/c payee cheque Rs.600000 and agrees to pay interest @ 10% is any legal problem in that

Replies (2)

Guest

Since you are a proprietory concern you will the taxed as an individual.

If your turnover is exceeding 1 cr (If business) / 25L(profession), then you should deduct tax at source @ 10% when you pay interest to the employee( He should furnish PAN)

Also make sure that the repayments of the loan are by A/c payee cheques too.