Is it compulsory in a partnership deed to have clauses for payment of Remuneration and intt. on capital even if as per arrangement between partners no such thing is required. There are only two partners, one is only working partner and contribute no capital and another will contribute capital of 5.00 Lac.
2 Replies
S.Srinivasaraghavan
(Chief Financial Officer and Co)
(11318 Points)
Replied 13 August 2008
If the firm is going to pay remuneration and interest it must have those clauses. Otherwise no.
selvam.T
(CA Practice)
(49 Points)
Replied 13 August 2008
yes. there should be a clause in deed to allow it as a expenditure. Otherwise will not be allowed. Somebody provide a clause like " partners entitled to interest and salary as allowed in the income tax act. it is not a valid clause to allow salary and interest income tax
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