if the profit of the parnership firm transfers to parners capital account and the drawings are made from it is the drawings taxable just like u/s 40(b)
Unnikrishnan B (Branch Manager) (740 Points)
29 March 2014if the profit of the parnership firm transfers to parners capital account and the drawings are made from it is the drawings taxable just like u/s 40(b)
CA Devanand Jethanandani
(CA)
(8003 Points)
Replied 29 March 2014
Hi Unnikrishnan,
Not taxable.
Tax can not be levied twice on the same profit, as partnership firm might have paid tax on its profit, the same profit which is credited to parnters' capital account can not be taxed again.
Regards,
Devanand
CAclubindia
