Sir, is there any limit of interest on capital payable to partners, where Int. is paid as per p.deed. Pl. Clarify.
B.P. SRIDHAR (ADVOCATE AND TAX LAWS CONSULTANT) (80 Points)
10 August 2016Sir, is there any limit of interest on capital payable to partners, where Int. is paid as per p.deed. Pl. Clarify.
CA MANISH BINDAL
(CHARTERED ACCOUNTANT )
(535 Points)
Replied 10 August 2016
Yes, The payment of interest to a partner should not exceed the amount calculated at the rate of 12% per annum simple interest ( Any amount in excess will be disallowed.)
B.P. SRIDHAR
(ADVOCATE AND TAX LAWS CONSULTANT)
(80 Points)
Replied 10 August 2016
Thank you sir., But Int. Is around 5 lakhs @ 12%. Is it fully allowable? Pl clarify
CA MANISH BINDAL
(CHARTERED ACCOUNTANT )
(535 Points)
Replied 10 August 2016
Yes, if it is within the limit of 12% then it will be fully allowed without any monetary limit.
B.P. SRIDHAR
(ADVOCATE AND TAX LAWS CONSULTANT)
(80 Points)
Replied 10 August 2016
Thank you sir., But Int. Is around 5 lakhs @ 12%. Is it fully allowable? Pl clarify
CA MANISH BINDAL
(CHARTERED ACCOUNTANT )
(535 Points)
Replied 10 August 2016
Yes, It is fully allowable if profit of firm are sufficient to adjust such income.
B.P. SRIDHAR
(ADVOCATE AND TAX LAWS CONSULTANT)
(80 Points)
Replied 10 August 2016
Thank you v.much sir.
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