Can Interest on Capital be paid in case of Proprietorship/Partnership

Last updated at August 14, 2026 by

Slide13.JPG

Remove Ads

Transcript

Rule for Interest on Capital Proprietorship Proprietor Invest Capital in Business Can he take Interest on this Capital from Business Not Allowed As Proprietorship and Proprietor are Same Legal Persons) Partnership Partner Invest Capital in Business Can he Take Interest on this Capital from Business Allowed As Partnership and Partners are Different Legal Persons) Conditions Allowed in Case of Audit Case Only Allowed to both Working and Non Working Partner Max 12% interest on Allowed

CA Maninder Singh's photo - Co-founder, Teachoo

Made by

CA Maninder Singh

CA Maninder Singh is a Chartered Accountant with 16+ years of practical experience and 20+ years of teaching experience. At Teachoo, he simplifies Accounts, Tax and GST with step-by-step examples so students can apply concepts confidently in exams and real life.

For an uninterrupted learning experience, students can use Teachoo Black to remove ads and focus better.