Partnership act

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pranita pansare (Querist)
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21 February 2009 we hav started a new business as partnership ,
two partners are there fixed Capital 25000 per head.
other than this they paid 500000 per head to start a business .

This 500000 should i consider as current a/c or loan a/c

if the same i will consider as loan then how much percent interest on loan i have to pay

please advice me accounting treatment for the same

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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21 February 2009 If there is a specific clause in the Partnership Deed that partners are permitted to bring in money as loan, then Rs 5,00,000/- brought in can be considered as loan.

Interest can be given if the partners so wish,on the strength of resolution, at a rate not more than the bank rate.

pranita pansare

pranita pansare (Querist)
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21 February 2009 in partnership deed such clause is not there about the loan

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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21 February 2009 Either amend the deed ,if the partners so wish, or treat it as amount brought in to the C/A.

pranita pansare

pranita pansare (Querist)
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21 February 2009 If it is mentioned in partnership deed that
simple intrest at the rate of 12% pa or such lower/higher as may be prescribed u/s 40 (b) (vi) of the income tax act, 1961 shall be payable by the firms on the amount standing to the credit of the capital and/or current a/c or loans of the partners a/c.

please explian me this& accounting treatment for the same

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