Whether 'interest' realised from Partners on their borrowing from Firm forms part of 'business income' considered for calculation of Book Profit for allowing partner's salary?
hkverma (officer) (25 Points)
06 April 2014Whether 'interest' realised from Partners on their borrowing from Firm forms part of 'business income' considered for calculation of Book Profit for allowing partner's salary?
Income Tax Wala: (Fin. Expert)
(Chartered Accountants)
(2015 Points)
Replied 07 April 2014
It depends on the nature of business run by partnership firm if firm is doing lending business than only that interest realized from partners can be a business income and considered for computing book profit other wise that interest will be a income from other source and would not consider for book profit.
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