Accounts
This query is : Resolved
Debjit Saha
(Querist)
19 August 2011
If in a partnership deed written about Interest on capital. Then the partnership firm achieve 80000 as profit. Then came a Interest on loan 40000. And calculated Interest on capital is 50000. Then how it will be treated?
CA Ashwani Agarwal
(Expert)
19 August 2011
For income tax purposes interest on capital is allowed for not more than 12%.
You can show the same as it is and there will be net loss for the firm.
You can show the same as it is and there will be net loss for the firm.
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Debjit Saha
(Querist)
19 August 2011
Sir,
When first time ask for the question then i get answered that Interest on capital can be provided when profit are sufficient.Sir please tell me briefly.
When first time ask for the question then i get answered that Interest on capital can be provided when profit are sufficient.Sir please tell me briefly.
CA Ashwani Agarwal
(Expert)
19 August 2011
It applies on salary of partners. You can pay the salary if there are profits. There are a lot of provisions related to salary in section 40(b) of income tax.
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