Interest on Capital

This query is : Resolved

Report Abuse Follow Query Ask a Query

Querist : Anonymous

Querist : Anonymous (Querist)

12 October 2010 Interest recd by the Partner from the firm will be taxable in the hands of Partner or Firm

taxindiaconnect

taxindiaconnect (Expert)
Follow

12 October 2010 The interest received from firm within the prescribed limits as per income tax is taxable in the hands of the partner as business income. Any amount which is over and above the prescribed limit shall be added back to the taxable income of the firm.

CA Sanat Pyne

CA Sanat Pyne (Expert)
Follow

12 October 2010 maximum amount of interest is allowable in the hands of firm is 12%. and the same will be taxed in the hands of partner.
If firm pays any amount in excess of that the same will be disallowed and partner will not liable to pay tax on the excess amount.

Upgrade to CAclubindia Pro. Subscribe Now!