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Interest on capital in Partnership Firm

R Hiremath (articleship) (137 Points)

08 October 2021

Hello Everyone, My question is should I consider Interest on Capital while calculating percentage of profit on turnover for 44ab of Income Tax act. Thanks & Regards in Advance.

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yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 08 October 2021

https://carajput.com/learn/different-meaning-of-turnover-in-income-tax-act-companies-act-and-gst.H T M L

Yes. If it is business income, it forms part of turnover

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 09 October 2021

No you can't as it's not your business income.

Income Tax Wala: (Fin. Expert) (Chartered Accountants) (2010 Points)
Replied 10 October 2021

as per section 28 of IT Act 1961 any interest, salary, bonus, commission , or any amount due to or received by a partnner from a firm is taxable under as your business income. hence includable in tax audit limit u/s 44AB

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