Amitabh and Babul are partners sharing profits in the ratio of 3:2, with capitals of Rs. 50,000 and Rs. 30,000 respectively. Interest on capital is agreed @ 6% p.a. Amitabh has also given a Loan on April 01, 2024 of Rs. 50,000 to the firm without any agreement. Calculate Interest on Amitabh's Loan assuming books are closing on 31st March, 2025.
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Rs. 3,000
A loan by a partner is not capital. Where there is no agreement about interest on it, the Partnership Act gives the partner interest on the loan at 6% per annum, and this interest is a charge against profit. The rate of 6% agreed for capital is a separate matter and does not decide the loan interest.
Loan given on April 01, 2024; books closed on March 31, 2025, so interest is for 12 months.
Interest on loan = Rs. 50,000 × 6/100 = Rs. 3,000
“Nil” would apply to interest on capital without an agreement, not to interest on a partner’s loan.
NCERT (2026-27 edition):
NCERT (2026-27 edition): |
