calculation of profit in partnership firm for 8% of turnover

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Vijay Mohan (Querist)
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09 October 2016 the firm had a turnover of 65 lakshmi and earned profit of Rs.58000. after deducting remuneration and not on capital. if these two added the profit is above 8% of turnover. whether the firm liable for tax audit.

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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09 October 2016 The firm is not liable to tax audit.

Kaushik Joshi

Kaushik Joshi (Expert)
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10 October 2016 Dear Vijay Mohan, for calculating 8% profit you're required to consider 8% profit with remuneration if given...

Kaushik Joshi

Kaushik Joshi (Expert)
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10 October 2016 however, since this f.y. you're not to consider payment to partner l.

Amol S Joglekar

Amol S Joglekar (Expert)
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10 October 2016 8 % is before remuneration.....so you dont have to do tax audit

Kaushik Joshi

Kaushik Joshi (Expert)
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10 October 2016 Dear Vijay Mohan, where I said this f.y. I meant from f.y.16-17 you shall not consider partners remuneration. for years before f.y.16-17, you have to consider partners remuneration as part of book profit for the purpose of calculation of 8% profit u/s 44AD.

Vijay Mohan

Vijay Mohan (Querist)
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10 October 2016 weather interest. on partners capital is also considered

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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10 October 2016 8% profit is before interest on partners capital.

Kaushik Joshi

Kaushik Joshi (Expert)
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10 October 2016 yes interest to partner and salary to partner is also considered but only up to f.y. 15-16.

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