Loan given to employees

Querist : Anonymous (Querist) 17 December 2010 This query is : Resolved
Hi

I would like to know that if organisation is giving interest free loan to their employees is it necessery to take the loan agreement on stamp paper, if yes what will be the amount of stamp paper/franking.

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Advocate. Arunagiri (Expert) 17 December 2010
It is optional to take a loan agreement. Just a letter of undertaking to deduct the loan from the salary is sufficient. However if the loan is disbursed by cash getting a stamped receipt is advisable.