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Interest on cap when firm on loss

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Querist : Anonymous

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Querist : Anonymous (Querist)
14 September 2014 when firm is making loss in last two years , is it necessary to provide the interest on capital on partners capital account ?

firm is ready to amend the partnership deed?

pl give the insight on it.
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CA VISHWAKEERTHI.P.S.

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CA VISHWAKEERTHI.P.S. (Expert)
14 September 2014 Usually interest waived off when firm in loss. If the partner mutually agreed among them and deed authorized to do so.

If you charges interest in the firm same taxed in the individual hands .
Firm business loss increases to that extent.

I my opinion:
If firm have the capacity to earn the profit in future days (i.e., with in 6 years as already 2 years loss suffered) make the interest provision there by business will surfer loss and when firm make the profit you can set of the earlier loss with it.

Other wise you require to pay tax on those days.
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