https://www.taxtmi.com/news?id=15619 Interest paid to partners on capital contribution is an expenditure under Section 36 and not a statutory allowance under Section 40(b); it must satisfy deduction conditions under Section 36 before Section 40(b) can limit it. If the interest relates to income not includible in total income, it is disallowable or allowable only against that exempt income under the provision addressing expenditures in relation to exempt income and the applicable rules, thereby reducing the exempt income rather than the taxable business income, and the partners must include the interest in their individual returns. en-us Fri, 05 Feb 2016 19:37:16 +0530 Fri, 05 Feb 2016 19:37:16 +0530 TaxTMI RSS Generator https://www.taxtmi.com/news?id=15619 Interest paid to partners on capital contribution is an expenditure under Section 36 and not a statutory allowance under Section 40(b); it must satisfy deduction conditions under Section 36 before Section 40(b) can limit it. If the interest relates to income not includible in total income, it is disallowable or allowable only against that exempt income under the provision addressing expenditures in relation to exempt income and the applicable rules, thereby reducing the exempt income rather than the taxable business income, and the partners must include the interest in their individual returns. News - Fri, 05 Feb 2016 19:37:16 +0530 https://www.taxtmi.com/news?id=15619