Hello All,
Could some body please let me know that Companies Ordianance 1984 does not ask for the interest charge to employees on the loan taken by them. Please advise.
Thanks
Trent.
Dear,
CO 1984 does not require any interest on staff loans.
Regards,
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Income tax ordinance requires that if no interest is charged or the interest charged is less than benchmark rate, the interest or the difference is to be added in salary for tax computation purpose
Hi, Sallam,
Schuaed is right, Current Bench mark Rate is 11%,
If employee taken loan 100000 without Interest, then employer shell add 11% of loan amount (11000) into employees Taxable Income for the year.
If employee taken loan 100000 with 6% Interest , then employer shell add 11%-6% of loan amount (5000) into employees Taxable Income for the year.