As per the Indian Partnership Act, 1932, when there is no partnership deed or when the deed is silent on certain matters, specific provisions automatically apply.
For interest on drawings, the Act states that no interest is charged on the amount withdrawn by partners from the business.
Interest on drawings is only applicable when it is specifically mentioned in the partnership deed with the rate and terms clearly stated.
Other key provisions in absence of partnership deed:
- Profit sharing → Equal ratio
- Interest on capital → Nil
- Interest on loan by partner → 6% per annum
- Salary to partners → Nil
The correct answer is Option 2: Nil