Book Profit - partners remuneration
This query is : Resolved
10 July 2011
Which is the Book Profit to be considered for calculating partners remuneration?
10 July 2011
Gross Profit & Other P&L Income....450000
Less:..... Business Expenses .......50000
Balance of profit .................400000
Less:
.
Interest to Partners....... 30000
.
Book Profit........................370000
Remuneration will be calculated on the basis of 370000/
Less:..... Business Expenses .......50000
Balance of profit .................400000
Less:
.
Interest to Partners....... 30000
.
Book Profit........................370000
Remuneration will be calculated on the basis of 370000/
Message likes :
2 times
11 July 2011
Whether disallowances are also added back, and then the remuneration is calculated?
Regards,
Devendra K
Regards,
Devendra K
11 July 2011
Yes, Devendra, you have to include the items disallowable for calculating the remuneration as such items are taxable and as such form part of the book profit.
11 July 2011
Yes, Devendra, you have to include the items disallowable. See the modified Example-
Gross Profit & Other P&L Income....450000
Less:..... Business Expenses ........50000
Balance of profit .................400000
Add:
Provision for Income Tax (Disallowable)
20000
Profit after Disllowables ..........420000
Less:
.
Interest to Partners.............. 30000
.
Book Profit........................390000
Remuneration will be calculated on the basis of 390000/
Gross Profit & Other P&L Income....450000
Less:..... Business Expenses ........50000
Balance of profit .................400000
Add:
Provision for Income Tax (Disallowable)
20000
Profit after Disllowables ..........420000
Less:
.
Interest to Partners.............. 30000
.
Book Profit........................390000
Remuneration will be calculated on the basis of 390000/
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