Some information required on Partnership Firms.

I would be glad if someone answers my querries in the following regard:

 

1 Can a partnership firm take loan from others(i.e. friends & relatives fo partners)
2 If yes what is the maximum percentage of interest that can be paid to them
3 If in the partnership deed the business mentioned is "Renting of movable & immovable property", under which head would rent from flats, shops be taken Income from House property or Business & profession.
   
4 What is the rate of tax on capital gains for partnership firm
5 Can business income of current year be set off against Capital Gains of current year, 
  what if the business losses are of previous years, can set off be claimed

Kind Regards,

Rehman

Replies (4)

1. Can a partnership firm take loan from others(i.e. friends & relatives fo partners)

Ans - Yes

 

2 If yes what is the maximum percentage of interest that can be paid to them

The firm can pay interest upto a reasonable rate and not at excessive rates.

Generally a rate on which other parties are paid or a rate of say 12 % p.a. can be considered as reasonable.

3 If in the partnership deed the business mentioned is "Renting of movable & immovable property", under which head would rent from flats, shops be taken Income from House property or Business & profession.

If the property belongs to the assessee ,  income from letting out must be taken under the head income from house property. But as the deed itself declares as a business of the firm , you can take income under the head business & profession.

 

4 What is the rate of tax on capital gains for partnership firm

20% on Long Term Capital Gains

30% on Short Term Capital Gains

5 Can business income of current year be set off against Capital Gains of current year,
 

Reply-  For Set off in one head there should be loss  in another head.

Current year's business loss can be set off against Long Term Capital Gains of current year     

But in the next year the b/fd business loss can be set off against any business income only.

To, Paras Sir,

3. As you mentioned above, in point no. 3 that rent from flats, shops be taken in Business Income in this case, will the flats & shops be eligible for depreciation, if yes under which category as per Income Tax ( I think closed must be " Dep on Buildings")

Pls Solve my doubts in this regard.

One more thing to ask  

6. Can a partnership firm be partner in another firm, If yes can it receive remuneration as other Individual partners as per Income Tax.

Kind Regards,

Rehman

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