Question

Riya, Rita and Renu were partners in a firm. On 31st March, 2023 Renu retired. The amount payable to Renu \rupee 2,17,000 was transferred to her loan account. Renu agreed to receive interest on this amount as per the provisions of Partnership Act, 1932. The rate at which interest would be paid to Renu is:

• A. \(9\% \ \text{p.a.}\)
• B. \(6\% \ \text{p.a.}\)
• C. \(12\% \ \text{p.a.}\)
• D. \(10\% \ \text{p.a.}\)

Hint:

Always refer to the Indian Partnership Act, 1932 when there is no partnership deed or agreement on specific terms. For loans given by a partner, the default interest rate is \(6\%\ \text{p.a.}\).

Answer 1

The Correct Option is B

According to the provisions of the Indian Partnership Act, 1932, interest on a partner’s loan is paid at the rate of \(6\%\ \text{p.a.}\), unless a different rate is agreed upon in the partnership deed. Since no specific rate is mentioned here, the applicable interest rate will be \(6\%\ \text{p.a.}\).