Tax news | Have taken loan from employer? Tax will be charged, know details, have taken loan from employer? Tax will be charged, know details

Tax news | Have taken loan from employer? Tax will be charged, know details, have taken loan from employer? Tax will be charged, know details

Have taken loan from employer?  Tax will be charged, know details

Tax on loan&nbsp

The second wave of the COVID-19 pandemic had left many unprepared in terms of their financial preparedness to deal with the health emergency. Employers must have applied for overdraft or loan facility from their employer to meet their financial obligations in connection with health emergency. It is possible.

As per the recent notification of the government, the financial assistance received from employers to employees for COVID-19 is tax free. However, if the financial assistance is received from the employer in the form of a loan, it will be taxable. Employees apply for loans from employers for children’s education, medical emergencies, marriages, etc., along with various other needs, depending on the company’s policies.

Such loans can be given by employers at a concessional rate or at zero percent depending on the policies of the company. It is to be noted that such concessional loans attract income tax as a perquisite in the hands of the employee. These are considered as savings in terms of lower interest rate which would otherwise be higher if received from external channels.

The employer is likely to levy Tax Deducted at Source (TDS) on this income as it is part of salary. However, if the employer fails to deduct it, it is up to the employee to pay tax on the same. The tax on such income is calculated on a monthly basis on the outstanding loan on the last day of each month. The interest on this amount is calculated on the first day of the respective financial year at the rate of interest charged by the State Bank of India in respect of the same loan. For example, educational loan, vehicle loan, home loan or personal loan. The remaining amount is taxable.

See also  Petrol Diesel Price Hike' Petrol prices, diesel prices,Fuel Price Update, petrol price, diesel price, petrol, petrol diesel infographics, diesel, fuel prices

However, there are exceptions to this rule. For example, an aggregate amount up to Rs.20,000 is not taxable. Also, loans taken for treatment of ailments in specified hospitals are also not taxable.


#Tax #news #loan #employer #Tax #charged #details #loan #employer #Tax #charged #details

Leave a Reply

Your email address will not be published. Required fields are marked *