Based on following, answer the question.

Mr. A, Mr. B and Mrs. C are friends, graduated from JIM Calcutta with specialisation in finance. They started a financing business as a partnership firm. In a written Partnership Deed they specify that the profit sharing ratio amongst them would be 3 : 2 : 1 and interest of capital would be provided @ 5% p.a. However no specifications were made in partnership deed about the interest on drawings and loans. The capitals contributed by them were 3,00,000, 2,00,000 and 1,00,000 by A, B and C respectively. During the year Mrs. C withdrew 20,000 to meet her family expenses. Looking at insufficient capital Mr. B introduced another 1,00,000 as capital into the firm on 1^st June 2021. The business was expanding and for the same purpose the firm took a loan from Mr. A of 3,00,000 on 1^st October 2021. During the year ended 31 March, 2022 firm earned a profit of 4,00,000 before charging rent of 20,000 p.a. Looking at the competency of Mr. D being a C.A. Mr. B wanted to introduce him in the partnership firm as a partner. The firm started its operation on 1^st April 2021.

Mrs. C withdrew 20,000 from her capital to meet her family expenses. What amount of interest on drawing will be charged from her?

No interest on drawing will be charged

The correct answer is Option (4) - No interest on drawing will be charged.

There is no clause regarding interest on drawings. So, interest on drawings is not charged.

If there is no clause in the partnership deed of the partnership firm then the provisions of the Partnership Act, 1932 will be applicable. Some of the provisions are:
a) Profit Sharing Ratio: In the absence of a specified profit sharing ratio in the partnership deed, the profits and losses of the firm will be divided equally among the partners, regardless of their individual capital contributions.
b) Interest on Capital: Unless explicitly stated in the partnership agreement, partners do not have the right to claim interest on the capital they have invested in the firm.
c) Interest on Drawings: If the partnership deed does not mention anything about charging interest on drawings made by partners, no interest will be levied on such withdrawals.
d) Interest on Loan: If a partner has provided a loan to the partnership for business purposes, they are entitled to receive interest on the loan amount at a rate of 6 percent per annum.
e) Remuneration for Firm’s Work: No partner is entitled to get salary or other remuneration for taking part in the conduct of the business of the firm unless there is a provision for the same in the Partnership Deed.