13 August 2012
We are a partnership firm, and according to our partnership deed all 4 partners claim 12% interest on our capital invested. Partnership deed says "The firm shall pay interest @12% per annum to the partners on capital.Or at the rate prescribed in Income Tax Act1961 and which may vary according to the rate mentioned in Income Tax Act 1961.However in case of loss partners may agree on an interest rate lower than this." But this year(FY-11-12) we want to take less interest than 12% as profit is less than preceding year.(however there is no loss) Can we do that?and if yes than how?
To ask u whther the firm hold any stamp paper worth Ra.200 anytime during the year 2011-12...If YES...u may revise the %age of Interest p.a. with effect from 1st April 2011and accordingly recover or pay interest on capital to the Partner.It will be a supplementary Deed... In case ur answer is NO...then the deduction at the lower rate of Interest is not permissible. Further, refer the clause in the Partnerhsip Deed towards Payment of Interest. Ok...
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