If the business has provided Unsecured Loan to friends/relatives.
Is it compulsory to charge Interest on that Loan every year?
Or that same amount can be remain outstanding.
Himanshu Agarwal (Proprietor) (186 Points)
05 March 2021
CA. Sourav Sarkar
(Chartered Accountant )
(24583 Points)
Replied 05 March 2021
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 05 March 2021
Drawing means cash or goods withdrawn from the business by the proprietor for personal use. It reduces the capital of the proprietor. Interest on drawings will be charged from the partner’s capital account, only if it is mentioned in the partnership deed. If partnership deed is silent, no interest on drawings will be charged. According to the business entity concept interest on drawings will be treated as income for the business and loss for the partners.
Live class on PF & ESI Enrollment & Returns Filing(with recording)
CAclubindia
