A private limited co. engaged in manufacturing activity had general reserve of ₹ 20 Lacs. It granted a loan of ₹ 5 Lacs to a director who held 13% shareholding cum voting rights in the co. The said loan was repaid 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 co. engaged in manufacturing activity had general reserve of ₹ 20 Lacs. It granted a loan of ₹ 5 Lacs to a director who held 13% shareholding cum voting rights in the co. The said loan was repaid 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