02 January 2010
Dear Rupesh As per Sec 40(b) of IT Act, Partners are eligible for Remuneration subject to ceiling mentioned in the said section or agreed by partners in Partnereship Deed whichever is lower, Partner's Remuneration should be Debited to P/L A/c as indirect Exps. & credited to Partner's Capital A/c 2) Profit has Credit Bal. so Debit the P/L A/c so that P/L A/c get Closed & Credit to Partner's Capital A/c (in Profit Sharing Ratio)
02 January 2010
In the return of income of partners, remuneration from the firm need to be disclosed and offered for taxation under the head "profit and gains of business or profession".
04 January 2010
Dear Rupesh I agree with above reply, but think some part of your query is still unreply. Partner in his return can claim expenses against the remunaration and interest income received from partnership firm provided he has incurred such expenses to earn such income.
CAclubindia
