Question

What rate of interest is allowed on the outstanding loan of a retiring or deceased partner as per partnership Act,1932?

• A. At existing bank rate.
• B. At 12% per annum.
• C. At 6% per annum.
• D. As per RBI guidelines.

Answer 1

The correct option is C At 6% per annum.

According to the provisions of Partnership Act 1932, any amount which is over and above the retiring or deceased partner's fixed capital, in the form loan or advances shall be entitled to interest at the rate of 6% per annum.