If a pvt limited company has taken an unsecured loan from the director and company want to write back the same.
1)Then would company will be eligible to setoff that income against carry forward business loss as per Income tax act, further under which head of income tax writing back of loan would be taxed ?
2) What would be the tax implications from director's side in his/her individual taxation as per income tax act?
Thanks in advance
It will income in hands of the company however, it is business income only and can be use to set off against previous brought forward losses.
In the hands of the director it will a business loss.
But I am not sure what are the consequenses under the companies act . & it would be worthwhile to verify why the company has decided to write back the loan also.
Regards
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I think it also depends on whether the director holds any shares in the company.
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