A company had given Rs.2.10 crores Loan in Sept 17 to an LLP in which managing Director of a company is partner holding 90% of ownership, LLP has repaid 2.06 crores to company in March 2018, is deemed dividend provisions apply to above transaction?
How to incorporate transaction in books of accounts so that company saves it's taxes deemeed dividend, please suggest
If company is closely held company (public is not substantially interested) and managing director is a shareholder holding not less than 10% voting power (equity shares) then any loans and advances to such shareholder or concern in which such shareholder holding substantial interest then such loans and advances will be treated as deemed dividend u/s 2(22)e.
Only way to save tax is that prove above transactions
Where money lending is the substantial part of the business and the transaction for loan or advance is made in the ordinary course of action, such payment shall not be taxable as deemed dividend
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