Let's check what all scenes are there.
This is my firm, Partnership Firm, and let's say these
three partners have invested 10 lakhs, 10 lakhs, 10 lakhs.
How much did the firm get? 30 lakhs.
And the firm has written on the Partnership Deed that
whatever capital you are giving us, on that capital I am
agreed to give you 18% interest per year.
So 18%
interest, this firm will give to these three partners.
If the firm gives interest, then the P&L account of the
firm will have the interest expense written here.
Simple story is going on, nothing much technical has been
said yet.
How much interest expense will be written here? It will be
5,40,000 rupees.
Okay? Now we have to see if the expense is allowed
or disallowed.
So the government has told us two conditions.
Condition number one.
Try to understand condition number one.
What is it? Condition number one, the government has told
us.
Do you have any Partnership Deed? Do you have any paper? Do
you have any paper which tells that yes, it is written here
that I will give this much interest to you.
Do you have any such paper? If not, then get lost from here.
Because you are not going to get any interest expense.
If you have paper, then talk.
If you don't have paper, then don't talk.
We are talking about educated people.
Without paper action, things don't move forward.
Do you have a Partnership Deed in which it is written that
we will pay interest on this much percent? Do you have it?
Very good.
Okay, next.
Now it is decided that you will get the interest deduction.
It is written in the deed that we will pay interest on this
much percent.
Yes, it is written.
Do you have the deed? Yes.
So you will get it.
Now how much will you get? Sir, how much will you get? So
the maximum government has said.
See, try to understand logically.
If I put as much interest as possible, suppose I give 100%
interest to my partners on their capital.
What is the objective of the firm? To show the minimum
profit.
How can I show the minimum profit? I will show the interest.
As much profit is remaining, the profit of 100 crores is
remaining.
Should I not show the interest of 100 crores? Here I showed
the profit of 100 crores, here the interest of 100 crores.
My profit will be zero.
Zero profit, zero income tax.
See, I saved the entire tax on 100 crores.
The government will say, son, tell me one thing.
Don't we have this intellect that if we do not tell the
limit of this thing, if we do not tell the limit of this
thing, then every person will do the same.
The interest will be shown so much that the profit will be
finished.
So the government said, it is very important to set a limit.
The limit is maximum 12% per annum per year.
This is the limit.
Do you have a partnership deed? It is written somewhere.
Do you have a partnership deed? It is written here.
Will you be given interest or not? Yes sir, I have it.
Very good.
How much have you given? Sir, I have given 18%.
I have given 18%.
Brother, I have given 18%.
It is allowed but maximum 12% will be given.
Then what should we do? Brother, what should we do? This
profit,
I had told you, right? Director sir, please show it to me.
Whatever profit will come, we will make some adjustments in
it, in the accounting profit.
Then it is fine.
All this will be disallowed.
First, add back 18% and how much will be allowed? Minus 12%.
You have to do this. Add back 18% in the profit and how
much will be allowed? 12%. Simple.
Any problem? You are allowed 12% interest.
What is the interest? The interest on capital account,
interest on current account, the interest that you give to
the partners, whatever interest you give, 12% will be
allowed.
If you give more than that, you will have to add back that
much.
12% will be allowed.
You gave interest of 100 crores, add back 100 crores again.
Fine. And how much will you allow? Only 12%.
But remember, the date on which that deed is made, the
interest should be after that date.
Sir, what are you saying? I want to say this, my dear.
I want to say that there is no shortage of people in this
country.
There was a person, Raju, Rancho and Farhan.
The head of Rancho used to move very fast.
He said, you said partnership deed? Yes, it should be in
the deed.
And you said that it should be of 12%.
And you also said that there is a limit of 12%.
If it is more than 12%, then we will add back.
Why not do such a thing that the deed, for example, is
being made on 1st April.
If the deed is made on 1st April 2022, then I will show the
interest of 100% before that.
I should get that.
The government also has an eye on transactions.
They say, we work so hard, sweat so much and make these
provisions and remove these loopholes.
What should we do? What should we do? Brother, tell me,
what should we do? In this case, the government says, get
my hands joined. 12% will be allowed.
And what is that? The date on which this deed is made, this
will be allowed.
It is written in the deed that it will be allowed from the
back date.
It is written in the deed.
What did you say? It should be a deed.
It is a deed.
And in this deed, I have added a line that the deed says
that you can take it from the back date also.
If it is a deed of 1st April, then I am saying that you can
take it from January also.
Give interest on January's money.
In that case, the government said that this
time period will not get any interest deduction.
Whatever interest deduction you will get, you will get it
only after the deed period.
Deed, whatever date it is, after that date.
Whatever you do on interest, its 12% maximum.
Meaning, whatever figure it is, its interest will be
allowed up to 12%.
That too after the deed period.
Whatever date it is, after that date.
Before the deed, you will not get any interest.
Am I clear or am I clear?