Accountancy Part AAccounting for Partnership

If partnership deed is silent, what is the interest on capital payabl…

If partnership deed is silent, what is the interest on capital payable to the partners?

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → No Interest is paid

NCERT (2026-27 edition):
Partnership Deed – “… (b) Interest on Capital: No partner is entitled to claim any interest on the amount of capital contributed by him in the firm as a matter of right. However, interest can be allowed when it is expressly agreed to by the partners. Thus, no interest on capital is payable if the partnership deed is silent on the issue.”