What is limit of interest on partners capital..
and under which section Income tax it can be disallowed.
2 Replies
prasad Nilugal
( GST Practitioner & Accounts )
(14868 Points)
Replied 26 January 2022
Refer section 40(b) of the Income tax act 1961.
Nidhi
(Chief Accountant)
(3150 Points)
Replied 28 January 2022
The rate of interest should not exceed 12%. If the amount of interest exceeds 12% of the capital then such excess amount is disallowed as per Sec.40(B) of Income tax Act, 1961
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