Interest rate on capital of partners
Sunil Sharma (Tax Consultant) (44 Points)
30 May 2016
Dear Sir,
I want to ask that What is minimum rate of interest on capital in Partnership firm?
4 Replies
Manish Jain
(Chartered Accountant)
(119 Points)
Replied 30 May 2016
There is no minimum rate. You can pay interest at 0%. However, anything pertaining to payment of interest on capital to partners should be mentioned in the Partnership Agreement.
Vinay somani (CA, CS)
(Assistant Manager-Accounts)
(549 Points)
Replied 31 May 2016
There is no minimum rate of interest on capital in case of partnership firm. but maximum rate of interest is 12%
subhash kumar jha
(PROFESSION)
(445 Points)
Replied 31 May 2016
No minimum and no maximum whatever u want u can pay to partner but it must be authorised by deed.
As per section 40b of income tax act firm will get deduction max of 12 % and partner will disclose as their business income.
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