machinery introduced by partner of Rs. 10 Lakh in the firm. Whether interest on capital introduced in the form of machinery of Rs. 10 lakh is allowed and also whether we can claim deprication on machinery in the books of firm. reply its urgent.
20 March 2010
Ya agreed. The interest on capital introduction by way of any asset or in any form can be given. But the overall interest on capital should not exceed 12% P.A.
When asset has been introduced by partner in the firm then it becomes the asset of the firm the depericiation can be claimed on it.
20 March 2010
Whether any formalities required for the introduction of capital by a partner in the form of machinery. Whether any agreement of transfer is required.
20 March 2010
No formalities as such or agreement is required. An entry to that effect in the books of accounts of the firm will be sufficient.
One Additional thing the transfer of capital asset to the firm by the partner results in sale of the asset by the partner to the firm and attracts capital gain provisions.
The partner will have to pay tax on the capital gain arising by transfer of such asset to the firm by intriduction of capital in the firm
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