Interest on drawing

This query is : Resolved

Chetan Shah (Querist)
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01 February 2014 helo..everyone!!! i just had a doubt whether interest on drawing paid by the partner to its firm is eligible as deduction to him for his computation of income??? an whether it will be taxable in firm's hand???

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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01 February 2014 Yes interest paid on drawing by partner is allowable as expenditure for the partner and income for the firm.

The computation of net interest from the Firm for a partner taxable in his hand is

Interest received from the firm on their capital or additions less Interest paid(charged by the firm) to the firm on the drawings of the partner.

OM SAI SRI SAI JAI JAI SAI