Interest paid by partner

This query is : Resolved

Hiloni Dedhia (Querist)
Follow

24 April 2014 Dear All,
Can anyone help me with this
A Partner has negative Balance in Capital and he pays Interest on Capital to the firm. Such Interest received by firm is assessed to tax by the firm. Can this Interest expense be claimed as a deduction by the Partner against Remuneration received from the same firm or be claimed as exempt? Please specify the section also

Nikhil Kaushik

Nikhil Kaushik (Expert)
Follow

24 April 2014 given that interest on capital received is included in Income, it is but natural that interest paid is claimed as an expense against the remuneration received from the firm

Hiloni Dedhia

Hiloni Dedhia (Querist)
Follow

24 April 2014 OK But can you give reference to any section which permits that

Nikhil Kaushik

Nikhil Kaushik (Expert)
Follow

24 April 2014 the income from partnership is covered under income from business/profession under section 28. It is a natural corollary that any expense shall be netted off against it.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now