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All QuestionsCategory: Income Tax ConsultancyINTEREST RECOVERABLE EXCEEDING THE LOAN AMOUNT
Profile photo of SUNNY WADHWASUNNY WADHWA asked 1 year ago

INTEREST RECOVERABLE EXCEEDING THE LOAN AMOUNT

A Pvt Ltd. gave loan to another Company around eight years back.

The rate of interest claimed is around 13%

 

 

Such another company deducted TDS every year on interest payable

 

In books of Pvt. Ltd. Company, the amount of interest recoverable 

has exceeded the amount of original loan as the another company has not made

any payment since the date of receiving loan neither towards principal

nor towards interest.

 

Please advise whether it would cause any problem for Pvt. Ltd. Company giving the loan

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1 Answers
Profile photo of Deepak Bholusaria, CADeepak Bholusaria, CA answered 1 year ago

From auditor’s point of view, this loan has become potentially bad.