Interset Income received in Firm deductible u/s 40b

This query is : Resolved

kalpana sharma (Querist)
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16 December 2010 A firm has received FDR interest income.whether Interest paid to partner u/s 40b can set-off with the above interst recd.

CA Ayush Agarwal

CA Ayush Agarwal (Expert)
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16 December 2010 Dear Kalpana,
Please Don't Confuse Urself.

Interest Paid to Partners by a Partnership Firm is Allowable @12% Even if No FDR Interest Received.

Interest Allowed Under Separate Section 40b of Business Profession.

But Look at The Rate Not More Than 12% is Allowable Even if Provided in Deed.

Regards,
Ayush Agrawal

kalpana sharma

kalpana sharma (Querist)
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16 December 2010 Thanks For ur reply. An Expert adviced me that there is a recent judgement on the same issue. Which is- FDR interest should be taken in Income from other sources & in such case Interest given to Partner should not be from the above..
So,I want to clarify on the issue..

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