Interest on partner capital
This query is : Resolved
03 August 2011
Suppose partner Mr.X is earning interest of RS.65.00 Lacs from the firm during a particular financial year then is he liable for Tax Audit under section 44AB
03 August 2011
interest is neither a income for carrying business and nor income from carrying professional therefore sec 44AB is not applicable.
03 August 2011
Interest Income is either assessed as ''Business Income'' or as ''Income from other sources'' depending upon the activities carried on by the assessee. If the investment yielding interest were part of the business of the assessee, the same would be assessable as ''business income'' but where the earning of the interest income is incidental to and not the direct outcome of the business carried on by the assessee, the same is assessable as ''Income from other sources''. Business implies some real, substantial and systematic or organized course of activity with a profit motive. Interest generated from such an activity is considered Business Income. Otherwise, it would be interest from other sources.
08 August 2011
thanks mr.navin
08 August 2011
This is interest to a Partner according to Mr. Tarun Shah, so it is always included in Income from B&P.
But as the firm gets itself audited, therefor the partner is not required to get its receipts audited.
But as the firm gets itself audited, therefor the partner is not required to get its receipts audited.
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