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Interest on capital

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(Querist)
11 October 2013 sir tell me the calculation of interest on capital provided to a partner of the firm
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Nikhil Kaushik

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Nikhil Kaushik (Expert)
11 October 2013 depends on whether the capital is fluctuating or fixed. If it is fixed, then apply normal simple or compound interest formula as may be agreed up by the partners.

If it is fluctuating, then use product method.
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CA Pallav Singhania

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CA Pallav Singhania (Expert)
11 October 2013 The present allowed rate as per 40{b} is 12 percent p.a

TDS on such interest is not applicable vide section 194A{3}{iv} of the IT ACT..
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