Question

Under Section 37 of the Indian Partnership Act, 1932, an outgoing partner may receive interest at the rate of:

• A. 5% p.a.
• B. 6% p.a.
• C. 8% p.a.
• D. 10% p.a.

Hint:

Under Section 37 of the Indian Partnership Act, 1932: \[ \mathrm{Outgoing\ Partner\ Interest} = 6\%\ \mathrm{p.a.} \]

Answer 1

The Correct Option is B

Concept: Section 37 of the Indian Partnership Act, 1932 deals with the rights of an outgoing partner or the legal representatives of a deceased partner when the remaining partners continue the business without final settlement of accounts. According to this section, the outgoing partner is entitled to:
• Share of profits attributable to the use of his share in the property of the firm, or
• Interest at the rate of \(6\%\) per annum.

Step 1: Understand the legal provision.
Under Section 37: \[ \mathrm{Interest\ Rate} = 6\%\ \mathrm{p.a.} \] Thus: \[ \boxed{\mathrm{6\%\ p.a.}} \]

Step 2: Analyze the remaining options.
5% p.a. This is not prescribed under Section 37. \[ \Rightarrow \mathrm{Incorrect} \] 8% p.a. This rate is not mentioned in the Partnership Act for outgoing partners. \[ \Rightarrow \mathrm{Incorrect} \] 10% p.a. This is also not the prescribed rate. \[ \Rightarrow \mathrm{Incorrect} \]

Step 3: Identify the correct option.
Therefore, the prescribed interest rate is: \[ \boxed{\mathrm{6\%\ p.a.}} \] Hence, the correct answer is: \[ \boxed{\mathrm{(B)}} \]