Regarding repayment of investment by persons other than partners

Partners can have different amount of investment.

It is not necessary to pay the money. You can pay interest on that

Dear Sir,

1) Infusion of money other than by partners is treated as loan. In your case as the amount has been received from the relatives therefore it would be treated as unsecured loan. There is no obligation to pay interest on loan as the investment is from related parties unless your firm had not given the same amount on interest to other parties. You can continue the loans in your books of accounts. It is not mandatory to repay it before closing of year.

2) Yes two partners can have different capitals in the firm.

Note- Repay all the loans through banking channels only.

Investment is only by partners in the form of capital.

Option to give interest is open to the firm.

Thanks

Hi,

You can continue the amount taken from other person to the next year as a loan and pay interest on that.

Yes, two partners can have different investment amount in the firm.

Please feel free to call/ revert in case you need more clarity.

Thanks and regards

Abhishek Dugar

CA CS B.Com

Hi

You don't need to pay back the amounts.

Show the amounts as loan and pay interests which shall be recorded as expense for the firm.

Yes, it is possible. However, there may be contradictory clause in the partnership deed specifying about partner's capital.

Since amount taken from relatives is treated as Unsecured Loan so you need not to repay it for closing books of accounts,

Yes Partners may have investment in different ratios.

Hope it clarifies.

Your auditor is partially correct.

TDS needs to be deducted on interest payments exceeding 5000. But, interest can be paid annually.

So, you can pay/credit interest in respective loan accounts before 31st March, deposit such TDS amount before 30th April and file TDS return before 31st May.

If you want to claim interest expense than TDS needs to be deducted otherwise you will not able to claim interest expense. As the loan is from related parties and you are not providing interest you can carry forward the amount to next years.

Yeah..if you have not paid TDS then its better not to pay or book interest in the books.

But, I dont know why is he asking for repayment of loan. You can keep the loan without payment of interest also.

Please feel free to call/ revert in case you need more clarity.

Thanks and regards

Abhishek Dugar

CA CS B.Com