Calculation book profit for partner's remuneration u/s 40(b)
This query is : Resolved
SANTANU SAHA
(Querist)
18 March 2014
Is this calculation OK?
Book Profit Calculation (For Partner's Remuneration Calculation u/s 40(b):
===================================================
Profit Before Interest, Depreciation & Taxes: 4,00,000
Add: Prov. For Income Tax (Disallowable): 20,000
Profit after disallowables: 4,20,000
Less: Interest to partners @ 12% p.a: 1,20,000
Book Profit: 3,00,000
Book Profit Calculation (For Partner's Remuneration Calculation u/s 40(b):
===================================================
Profit Before Interest, Depreciation & Taxes: 4,00,000
Add: Prov. For Income Tax (Disallowable): 20,000
Profit after disallowables: 4,20,000
Less: Interest to partners @ 12% p.a: 1,20,000
Book Profit: 3,00,000
sushil kumar
(Expert)
18 March 2014
Dear Santanu,
In this query, Interest to partners are allowable to the extent 12%. If 30000 are more than 12% then it is correct.
If partner salary allowed in books should be added back.
Otherwise ok.....
In this query, Interest to partners are allowable to the extent 12%. If 30000 are more than 12% then it is correct.
If partner salary allowed in books should be added back.
Otherwise ok.....
SANTANU SAHA
(Querist)
18 March 2014
I have used profit before interest, depreciation & taxes (which is also profit before any appropriation).
Then Why should i ADD Prov. of I.T to such profit in calculating Book Profit u/s 40(b)?
Then Why should i ADD Prov. of I.T to such profit in calculating Book Profit u/s 40(b)?
sushil kumar
(Expert)
18 March 2014
Dear Santanu,
If you have charged the provision for tax in profit and loss a/c, then it should be added back, otherwise not.
If you have charged the provision for tax in profit and loss a/c, then it should be added back, otherwise not.
CA P K AGRAWAL
(Expert)
13 October 2014
Profit should be taken after Interst and Depreciation
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