Interest on capital to partners in LLP allowed or not?

Tax queries 498 views 2 replies

142 Points Joined June 2009

A Pvt. ltd. company is converted into LLP in Oct 2017 adhering to conditions laid down in section 47 of IT Act.

Is interest on partner's capital allowed in 2019-20 so that there is no contravention to the above section?

Please help experts.

The LLP deed allows for the interest on partner's capital @ 12% per annum.

Replies (2)

133 Points Joined February 2018

It'allowed to the extent of 12%(For LLP ).In the hands of partners it will be taxable.

142 Points Joined June 2009

Originally posted by : Santosh Hegde
	It'allowed to the extent of 12%(For LLP ).In the hands of partners it will be taxable.

But it will contravene the provisions of section 47(iii) of IT Act? Right?

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