Interest on capital

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 March 2012 I am working in a partnersip firm.firm decided to give interest @ 12% on capital. 5(five) partners get seperately Rs. 145000/-
Do I need to get TDS if yes how much ?

thanks in advance

CA Dileep Surya Kumar

CA Dileep Surya Kumar (Expert)
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29 March 2012 TDS provisions are not applicable, in case of interest on capital paid by the firm to the partners. Refer 194A(3)(iv)

Querist : Anonymous

Querist : Anonymous (Querist)

29 March 2012 Thanks you very much

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Querist : Anonymous

Querist : Anonymous (Querist)

31 March 2012 dear sir,

do i credit interest before book profit or after book profit ?

CA Dileep Surya Kumar

CA Dileep Surya Kumar (Expert)
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31 March 2012 You can allow the interest before computation of book profit. No need to add back when computing book profit for ascertaining permissible salary to partners.