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Loan Advance Taken From Salary

Deepak Kumar (Chartered Accoountant) (270 Points)

15 February 2010

I have taken loan from my co. of Rs. 100000/. In feb 2010. & It will deduct from my salary by Rs. 10000/- Monthly installment. From March 2010. Will this loan be add in my salary as advance salary & Tds will be deducted. Currenty my salary is 40000. p.m.

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9 Replies

Ashish Sharma (Service) (1028 Points)
Replied 15 February 2010

Loan from Company not iincluded in income so No TDS liability on Loan repayment.

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PRAVEEN KUMAR (MBA (Finance) B.Com.(P)) (3443 Points)
Replied 15 February 2010

it will not include, but intrest fee loan may be taxable in your case...

Amir (Learner) (4016 Points)
Replied 15 February 2010

Dear Ajay,

Look there are 2 things -

1) Advance Salary - It will be taxable becos salary is taxable on receipt or due whichever is early..

2) Advance aginst salary (Loan) - As such it is not taxable but it will be taxed as per new perquisite valuation rules...Difference of rate of Interest charged by the SBI & the employer for a similar kind of loan will be valued as perquisite & included in ur salary..

(Guest)

TDS is not deducted on loan against salary. If Interest amount is lessor than the prescribed SBI rate of Interest the difference amount of Interest will be treated as perquisite and added in your total income.

saranraj (CA FINAL) (419 Points)
Replied 15 February 2010

Only advance salary is taxable. Advance against salary is not taxable. It should not be included in your salary. What you have got is a advance against salary which is repaid by you in monthly installments.

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PANKAJ AGRAWAL (PARTNER) (38 Points)
Replied 15 February 2010

If you are showing as a salary advance and you are not giving any interest to company than tds will be deducted and interest on loan will not be added in your salary as a perquisites.

And if you are giving interest on loan or interst is add in you salary as per perquisites rules than no tds will be deducted.

(Guest)

As per Sec.17(2) LOAN TAKEN FROM EMPLOYER DURING THE P.Y. ARE NOT TREATED AS ADVANCE SALARY.HENCE IT WILL NOT BE ADD IN THE SALARY AS ADVANCE SALARY...............

Neeta (CA IPCC Student) (168 Points)
Replied 01 March 2010

only adance salary is taxable. but advance against salary is not taxable , for example if u have taken loan from your employer then u will have to repay, so it is not taxable but if u will not repay then it will taxable.