Interest on Capital-Partnership Firm
This query is : Resolved
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14 January 2026
Can a parnership firm insert a clause in its deed wherein it is stated that the Interest on Capital will be payable to the partners at rate not above 12% and the same shall only be payable on the opening credit capital balance of the partners.No interest shall be payable on the capital withdrawn or introduced during the Financial Year for which the Interest is to be calculated.
15 January 2026
Yes — a partnership firm can validly insert such a clause in its partnership deed. It is legally permissible and tax-compliant, provided it is properly drafted.
15 January 2026
Ok Sir. Please guide for the Drafting of the same.
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