Partnership firm

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 August 2012 Dear Sir,
One of client is a partnership firm engaged in a civil construction. Before obtaining a contract they has to deposit 1% security of contract cost before the contractee, in the form of FD.
Suppose there is an FD of Rs. 5 lacs and interest earned thereon is 40000/-

Now I want to ask that, whether that interest amount would be income of firm or it should be taken as interest income of partners and should be show in their personal returns.

However, bank is deducting tds on the PAN no. of the Firm.

Please advise me

CA Amit Jaiswal

CA Amit Jaiswal (Expert)
Follow

29 August 2012 Interest will be the income of firm as it has been earned on the amount pertaining to firm not the partner.

In case you want tds to be deducted in Partner's name, the FD should be in Partner's name.

All the Best...