XYZ Limited given loan to ABC Limited of Rs. 50000 at interest rate 21 % .These companies are not related to each other.During the statutory audit of XYZ limited auditors raised the query. What are the provisions of law applicable ?
1 Replies
CA Rajat Bajaj
(Job)
(1042 Points)
Replied 30 May 2013
The interest rate is decided by mutual agreement between two comapny, the rate of interest can be anything, but if it is 21 % , it is high compared to othe market options, due to such a huge differnce the auditor had raise this query, you should show him the relevent documents of loan.
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