Abhi and Binu are partners in a partnership firm without any agreement. Abhi has given a loan of ₹50,000 to the firm in the starting of the financial year. At the end of the year, the loss was incurred in the business. ₹5,000 is demanded as interest on loan by Abhi even there is no agreement regarding this. What amount of interest is given to Abhi?

₹3,000

The correct answer is option 1- ₹3000.

If the partnership deed is silent about the interest on loan and if any partner has advanced loan to the firm for the purpose of business, he/she shall be entitled to get an interest on the loan amount at the rate of 6 per cent per annum. whether there is loss or not because interest on loan is charge against profit.

So, interest on loan = 50,000 x 6/100
                                = ₹3,000.