If there is any unpaid balance to the retiring/deceased partner, an interest @ 6% will be payable in the absence of specific provision in the partnership deed. This provision is contained in which of the following?

Accounting Standards Partnership Act 1932 Companies Act 1956 Government of India guidelines

Partnership Act 1932

In the absence of any agreement, Section 37 of the Indian Partnership Act, 1932 is applicable, which states that the outgoing partner has an option to receive either interest @ 6% p.a. till the date of payment or such share of profits which has been earned with his/her money (i.e., based on capital ratio). Hence, the total amount due to the retiring partner which is ascertained after all adjustments have been made is to be paid immediately to the retiring partner. In case the firm is not in a position to make the payment immediately, the amount due is transferred to the retiring Partner’s Loan Account, and as and when the amount is paid it is debited to his account.