Interest paid to ex-partner is it a deductable exp

NAGARAJAN RAJAGOPALAN (PROFESSIONAL ACCOUNTANT)   (54 Points)

28 July 2014  

A partner was retired from the partnership in the financial year end. by the by, one more financial year was also over. His amounts standing to his credit not settled till date.

Now, the ex-partner is asking interest for the amounts outstanding to his credit from the date of his retirement.   but in the retirement deed, there was no such thing was mentioned about the interest payment. but now, the other partners are principally agreed to pay to him @ 12% P.A from his date of his retirement.

can they now pay or make provision for  the same, is it (int) a deductable expenditure?

accordingly tds @ what percentage to be deducted?

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