Cash Repayment of Entire Outstanding Capital upon Retirement

[Guest]

Dear All,

My query is mentioned below:

Upon retirement, whether outgoing partner be paid his entire outstanding capital in cash? Whether any disallowance under section 40A(3) or under any other provision shall be attracted or not. The amount is ₹ 15,00,000 /-

Please reply with Reference Notification / Circular Case Law.

Thanks

Ravi Karda

AI Summary

Cash payment to retiring partner: whether full capital settlement in cash triggers disallowance under section 40A(3) or other rules. Whether an outgoing partner may be paid his entire outstanding capital in cash on retirement and whether such payment attracts disallowance under section 40A(3) or any other tax provision is the central issue; the query asks for authority, circulars or case law and highlights permissibility, applicability of disallowance rules, and related documentation and compliance considerations.