banner_ad

Interest on Capital-Partnership Firm

This query is : Resolved 
Quick Summary
Discussion on whether a partnership firm can restrict interest on capital to opening balances only and cap the rate at 12%. Experts confirmed that such a clause is legally valid and tax compliant if properly drafted in the partnership deed.

Profile Image

Profile Image

(Querist)
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shall only be payable on the opening credit capital balance of the partners.No interest shall be payable on the capital withdrawn or introduced during the Financial Year for which the Interest is to be calculated.
Profile Image

Aashok Kumar Sharma

Profile Image

Aashok Kumar Sharma (Expert)
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.
Profile Image

anuj kumar khaitan

Profile Image

anuj kumar khaitan (Querist)
15 January 2026 Ok Sir. Please guide for the Drafting of the same.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now


CCI Pro
Join CAclubindia WhatsApp Finance Community & stay updated with the latest TAX news, compliance alerts and important updates all in one place!


Similar Resolved Queries


loading


Unanswered Queries


banner

Trending Online Classes

view all classess

CCI Pro
Meet our CAclubindia PRO Members
Subscribe Now

Follow us
add to google news



Answer Query



Quick Links



Browse by Category




Latest Job Openings

View all
Company
10 May 2026
Finance specialist

Right way solution

Ajmer

CA

View Details
Company
26 May 2026
Audit executive

vdsr & co LLP

Chennai

CA Inter

View Details
Company
ARTICLESHIP 15 May 2026
ARTICLE ASSISTANT, TRAINEE AND PAID ASSISTANT

YOGESH KAPOOR AND ASSOCIATES

New Delhi

B.Com

View Details
Company
07 May 2026
CA Assistant

amit desai and co

Mumbai

CA Final

View Details
Company
08 May 2026
CHARTERED ACCOUNTANT

SHAH LADHA AND ASSOCIATE

Ahmedabad

CA

View Details
Company
27 May 2026
Audit Assitant

Virender K Gupta and Co

New Delhi

B.Com

View Details
Company
ARTICLESHIP 28 May 2026
Accounts, Audit & Compliance Executive

Shyam Joshi & Associates

Pune

B.Com

View Details
Company
Featured 28 May 2026
SEMI QUALIFIED/ CA DROPOUTS/ ARTICLES

T R SOOD & CO

New Delhi

CA Inter

View Details