What is interest on Capital?

Capital is the fund owner starts with the Business. To calculate the true profit owner charge Interest on the Capital which he/she started with the Business. Int. on Capital is the charge usually used in Pvt Ltd company.

As per Business entity concept Owner or proprietor treated as separate. The propritor gets interest from company on the invested capital for a specific period. This is taxable income to the proprietor and expenditure to the company

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