i have to draft the partnership deed of a firm engaged in the business of construction. it has three partners having equal shares.
i have read the income tax act and one of the conidtion in sec 40b for allowing the remuneration is that "IT SHOULD BE AUTHORISED BY AND IN ACCORDANCE WITH THE PARTNERSHIP DEED".
My question : How should i draft the clause so that remuneration should be as per the income tax act.
07 February 2013
That Mr. A , Ms. B and Mr.C the parties of the first, second and third part respectively,have agreed to keep themselves actively engaged in conducting the affairs of the business of the partnership firm. The said parties shall be 'working partners'of the firm. It is hereby agreed to that in consideration of the said parties keeping themselves actively engaged in the business of the partnership firm and working as working partners, they shall be entitled to remuneration.
That the remuneration payable to the said working partners shall be computed in the manner laid down in section 40(b)(v), read with Explanation 3 of the Income-tax Act, 1961 or any other applicable provision as may be in force in the income-tax assessment of the partnership firm for the relevant accounting year. Such amount of remuneration shall be distributed between the said working partners in the following proportion:
Mr. A .... % of the total remuneration calculated as above.
Ms.B .... % of the total remuneration calculated as above.
Mr. C. .....% of the total remuneration calculated as above.
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