30 July 2010
I want to clarify one doubt relating to Partner's Remuneration. i.e. Mr.A received Rs.360000/-p.a.from a Partnership Firm as salary, Is it fully taxable in the hands of Mr.A?
30 July 2010
the disallowance portion u/s 40(b) will be taxable in the hands of partnership farm.and amount allowable undersection 40(b) will be taxable in the hands of partner. because double taxation is not permitted.
31 July 2010
Thanks for your reply.But I couldn't come to the decision.Because different type of reply.
My query is , Mr. A is working in a firm & get Rs.360000/-p.a. this is the limit specified in the deed.Now that Firm's Net Profit is Rs.50000. For Firm's Tax Liability we have to arrive the Book Profit & deduct Allowable salary.But Partner's salary is separate issue. How will it(Allowable salary u/s.40(b)) affect the partner's Tax Liability.
31 July 2010
You have not mentioned whether are there any partner getting remuneration. Calculate Book Profit in the following format Net Profit 50000.00 Add: Partner' Salary (360000+ other partner's salary) Adjust other as per 40(b)
balance will be book Profit.
Now maximum Salary will be as follows If book Profit is negetive 150000 If book profit is positive then on first 3,00,000/- Rs. 150000 or 90% of book Profit, which ever is more On balance - 60% of book Profit.
31 July 2010
Yes and the new rates as mentioned by pyneji will be applicable only if the same has been incorporated in the partnership deed for the year or the new rates would apply from the date from which the deed has been modified not otherwsie.
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