Rent or interest
Querist : Anonymous
Where a partner providing his own land for business purpose then firm should pay rent to that partner
or
firm should pay interest @12% on the market value of property, considering it capital invested by partner.
Please clarify.
Querist : Anonymous
or
Only insertion of rent clause in partnership deed is sufficient.
1. if the firm considers the property as property taken on rent from partner, and there has been a rent agreement between firm and partner then the firm should pay rent
2. if partner consider the same as his capital contribution then firm should pay interest on property.
so you can do as you get favorable...
Querist : Anonymous
Why?
Tax-efficient: Partner gets 30% deduction under House Property.
Full rent deductible to firm — not capped at 12%.
Legal clarity: Property stays with the partner.
Easy to reverse: Just terminate rental agreement.
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