CA. Animesh Kumar Jain (ACA DISA (ICAI) B.Com) (226 Points)
03 October 2014Dear friends..
Greetings !
Private company is accepting Donation from an individual approx 25 lacs,
is there any boundation in companies act 2013 to accept it ?
also want to know the effect of Income Tax on It...
it would be taxable at the rate of 30%...is there any way to avoid it and bring money in company.
Jaikishan
(CA)
(168 Points)
Replied 03 October 2014
Section 73 states that No company whether public or private can accept deposit from anybody without complying with the provisions mentioned in Section 73. Clause (viii) of Rule 2(c) specifically excludes loans from directors from the purview of deposit definition if the director gives a declaration that the amount he is lending is not out of borrowed funds. Clause (vi) of Rule 2(c) excludes loans received from any other company from the definition of Deposits.
there is no restrictions in the Income Tax Act for extending loan/advances by the shareholders/directors of a Private Limited Company to the Company. Such loans shall be treated as unsecured loans and shall be examined during the course of assessment proceedings at par with other unsecured loans obtained by the Company other than shareholders/directors. The assessee Company has to establish the identity, creditworthiness and genuinity of such loans as stipulated U/s 68.
The provision of Section 2(22)(e)-Deemed Dividend is attracted in case the Company has extended loans and advances to shareholders/Directors having substantial interest in the Company. Substantial Interest means holding more than 10% of the voting rights in the Company.
CAclubindia
