CA PARTH SHAH (In Practice) (1951 Points)
11 July 2011hello friends
my query is on which amt of capital of the partner does the interest is calculated?
is there any provision under sec 40(b) which describes about the above query?
CA ADITYA SHARMA
(CA IN PRACTICE )
(16719 Points)
Replied 11 July 2011
IT IS TO BE CALCULATED ON NO. OF DAYS BASIS
APOORV SAXENA
(Chartered Accountant)
(794 Points)
Replied 11 July 2011
It is calculated on average basis for the whole year.
Sunshine
(Helping All)
(10575 Points)
Replied 11 July 2011
no. of days basis......no this is not specifically mentioned in the section
Deva R
(student)
(83 Points)
Replied 12 July 2011
Act doesnot specify about the days. it just fixed a maximum celing of 12% per annum. so u can pay till that limit subject to the conditions in partnership deed.
CA. MOHAMMAD.QUSROO
(CA FINAL)
(81 Points)
Replied 12 July 2011
IT IN ON OPENING BAL i.e Closing bal of Previous Balance AND MAX SHOULD NOT EXCEED 12%
Rup Kumar
(finance manager)
(288 Points)
Replied 13 July 2011
Nothing has been specified in this respect in the Act. However normally it is calculated on Opening balance of capital a/c.
RAJU
(LEARNER)
(1089 Points)
Replied 15 July 2011
Yes, it is not been provided in the provisions....
However, going by the logic, ideally, it is to be paid on the amount actually lent during the entire year.. In an instance where the partner has withdrawn the entire sum on 2nd day of the year, it is not logical to pay interest on the opening balance for the entire year. So I believe it is to be paid on daily balance...
CAclubindia
