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Interest on Capital and Current Account Interest Taxation Reg

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MEENA VIVEK

266 Points Posted on 16 August 2021

I am an individual and I am a Partner in Partnership Firms I have received interest on Capital and Current Account Amount from the Firms.The Said interest income to be added in Income from business or Profession or income from Other Sources.Kindly Clarify.Share of profit also received from the Firm is exempt in which section.Shall I claim these deduction in new tax regime.If I had business income for the coming assessment year i e 2022-2023(31-03-2022) may I withdraw the new tax regime in next financial year i e 31-03-2023.Kindly Clarify this also.

Replies (2)

Quick Summary

This discussion seeks clarification on how to tax interest received on capital and current accounts from partnership firms. The user wants to know if this income should be reported under 'Income from Business or Profession' or 'Income from Other Sources'. Additionally, they are inquiring about the tax exemption for profit shares from the firm and the applicability of deductions under the new tax regime, including the possibility of opting out of the new regime in the following financial year.

CA. Sourav Sarkar

Chartered Accountant

24588 Points Posted on 16 August 2021

It should be shown under income from other sources.

Nidhi

Chief Accountant

3150 Points Posted on 17 August 2021

Both interest from partnership firm and profit from firm required to be disclose under 'income from business or profession'
Profit from firm is exempt.