02 May 2016
1) There is no such rule which limits the expenses of the firm to only Rs. 20,000/-. Section 40A (3)(a) of the Income-tax Act, 1961 provides that any expenditure incurred in respect of which payment is made in a sum exceeding Rs.20,000 /- otherwise than by an account payee cheque drawn on a bank or by an account payee bank draft, shall not be allowed as a deduction. So you can pay by Cheque. The payment of interest to a partner should not exceed the amount calculated @12%p.a simple interest.
2)I'm assuming from your question that you are maintaining Firm's account in the tally. For transferring the Profit to the capital A/c of the partners, pass this entry - Profit & Loss Acc. Dr xxxx To Capital Account xxxx
02 May 2016
rule for you cannot pay the exp in cash exceeds rs. 20000/- mostly partner ship firm give the intt at the end of the year. and credited in capital a/c. For profit you pass the entry in tally Profit & loss a/c Dr. to capital a/c
CAclubindia
