calculation of profit in partnership firm for 8% of turnover
This query is : Open
Vijay Mohan
(Querist)
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
(Expert)
09 October 2016
The firm is not liable to tax audit.
Kaushik Joshi
(Expert)
10 October 2016
Dear Vijay Mohan,
for calculating 8% profit you're required to consider 8% profit with remuneration if given...
Kaushik Joshi
(Expert)
10 October 2016
however, since this f.y. you're not to consider payment to partner l.
Amol S Joglekar
(Expert)
10 October 2016
8 % is before remuneration.....so you dont have to do tax audit
Kaushik Joshi
(Expert)
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
(Querist)
10 October 2016
weather interest. on partners capital is also considered
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CA R SEETHARAMAN
(Expert)
10 October 2016
8% profit is before interest on partners capital.
Kaushik Joshi
(Expert)
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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