Interest on Loan
This query is : Resolved
02 August 2010
Dear Sir,
We have a partnership firm, and in the partnership firm the wife of the partner have invested in the firm
The question is whether interest paid to wife of the partner @ 15% is allowed or not.
Because in the hand on partner only 12% intt.is allowed.
Waiting for reply.
We have a partnership firm, and in the partnership firm the wife of the partner have invested in the firm
The question is whether interest paid to wife of the partner @ 15% is allowed or not.
Because in the hand on partner only 12% intt.is allowed.
Waiting for reply.
02 August 2010
Parntership regulations are only for the partners and not for the realtives of the partners.
Hence if the loan complies with the other conditions in the deed then a higher interest is allowable.
Hence if the loan complies with the other conditions in the deed then a higher interest is allowable.
02 August 2010
yES, IT CAN BE ALLOWED AS PER MARKET RATE.
BECAUSE IT WILL BE SHOWN IN TAX AUDIT REPORT, PAYMENT TO RELATIVE U/S 40A(2)
BECAUSE IT WILL BE SHOWN IN TAX AUDIT REPORT, PAYMENT TO RELATIVE U/S 40A(2)
Ratan Sharma
(Expert)
02 August 2010
It is allowed. it depend on the market rate of interest as well as the agreement between the parties.
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