Interest on capital to partners in LLP allowed or not?

CA Rohan Bajaj (CA) (141 Points)

06 October 2020  

A Pvt. ltd. company is converted into LLP in Oct 2017 adhering to conditions laid down in section 47 of IT Act.

Is interest on partner's capital allowed in 2019-20 so that there is no contravention to the above section?

Please help experts.

The LLP deed allows for the interest on partner's capital @ 12% per annum.