Question

Q.6 A partnership Deed provides for payment of interest on capital but there was a loss instead of profit during the year 2016-17. At what rate will the interest on capital be allowed?

Answer 1

Interest on Capital is allowed only when there is a profit. But since there is no profit no Interest on Capital would be allowed even if Partnership Deed provides it.

Answer 2

Explanation:

So, 2010-11 interest on capital cannot paid to the partners

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