What are the provisions for INTEREST ON CAPITAL allowed to partner u/h PGBP.
eg. as in may'10
Int. on capital 15% - 3,00,000
then how is the taxabilitiy for-
FIRM &
PARTNER
PLEASE EXPLAIN PROPERLY.
Thanks in advance.
Sushmita (CA-Final(Intern)) (262 Points)
01 October 2010What are the provisions for INTEREST ON CAPITAL allowed to partner u/h PGBP.
eg. as in may'10
Int. on capital 15% - 3,00,000
then how is the taxabilitiy for-
FIRM &
PARTNER
PLEASE EXPLAIN PROPERLY.
Thanks in advance.
CA.G.Muguntha Narayanan
(Internal Auditor at TVS Motors)
(2195 Points)
Replied 01 October 2010
Dear Friend.,In ur case, the excess of 3% is taxable disallowed in the case of firm, coz, u/s.40(b), only 12% is allowed as intrest
CA.G.Muguntha Narayanan
(Internal Auditor at TVS Motors)
(2195 Points)
Replied 01 October 2010
the interest income is taxable in the case of partner. However, it s taxable only to the extent of 12%, coz, the excess 3 % is already taxed in the case of firm.
So for firm, amount disallowed is Rs.60000
For partner, taxable interest is 2,40,000
Harpreet
(* * * * * *)
(1670 Points)
Replied 01 October 2010
Totally agreed with Mr. CA.G.Muguntha Narayanan
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