On 1st Jan, 2021 a partner advanced a loan of Rs 1 lakh to the firm. In the absence of any agreement, the interest on loan payable to the partner on 31st march 2021 will be...........

₹1,500

The correct answer is option 2- ₹1,500.

If partnership deed is silent in respect of certain aspects, the relevant provisions of the Indian Partnership Act, 1932 become applicable. According to the Partnership Act, the partners share profits equally, no partner is entitled to remuneration, no interest on capital is allowed and no interest on drawings is charged. However, if any partner has given some loan to the firm, he is entitled to interest on such amount @ 6% p.a.

Thus, interest on loan which has been given for a period of 3 months will be:
= 1,00,000 *6/100*3/12
= 1,500