True test of partnership is

Option (1) is incorrect: Explanation 1 under Section 6 of the Partnership Act states that the sharing of profits or of gross returns arising from property by persons holding a joint or common interest in that property does not on its own make such persons partners. Option (2) is incorrect: Explanation 2 under Section 6 of the Partnership Act states the receipt by a person of a share of the profits of a business does not on its own make him a partner with the persons carrying on the business. Option (3) is correct: Under Section 6 of the Partnership Act, in determining whether a group of persons is or is not a firm or whether a person is or is not a partner in a firm, regard shall be given to the real relation between the parties. Option (4) is incorrect: No such agreement to share profits of business makes him a partner in the firm.