A private limited company engaged in manufacturing activity had general reserve of ₹ 20 lakh. It granted a loan of ₹ 5 lakh to a director who held 13% shareholding cum voting rights in the company. The said loan was re-paid by him before the end of the year. The amount of deemed dividend arising out of the above transaction is –
A. ₹ 2,60,000
B. ₹ 2,40,000
C. ₹ 5,00,000
D. Nil
Answer:C
A private limited company engaged in manufacturing activity had general reserve of ₹ 20 lakh. It granted a loan of ₹ 5 lakh to a director who held 13% shareholding cum voting rights in the company. The said loan was re-paid by him before the end of the year. The amount of deemed dividend arising out of the above transaction is –
A. ₹ 2,60,000 B. ₹ 2,40,000 C. ₹ 5,00,000 D. Nil