Can spouse enter into partnership

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 September 2014 hello friends, i am in a dilema whether husband and wife enter into partnership ? the business does not requires technical skill. will clubbing provision apply?

Nikhil Kaushik

Nikhil Kaushik (Expert)

16 September 2014 1. no clubbing should not apply.

2. even if clubbing apply, how would it matter as profit share from partnership will be exempt from taxation...so clubbing wont have any tax impact!

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Querist : Anonymous

Querist : Anonymous (Querist)

16 September 2014 thank you sir. excuse me for not being clear with my question. my query of clubbing was related to allowable remuneration to partners under section 40 (b). if spouse who is a partner is paid remuneration under section 40 (b) than clubbing provision shall not be applied and remuneration will not be clubbed in the hands of husband. right sir?

Nikhil Kaushik

Nikhil Kaushik (Expert)

16 September 2014 if both partners are active partners and are involved in the activities, then no clubbing should apply.

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Querist : Anonymous

Querist : Anonymous (Querist)

16 September 2014 thank you very much sir.

Nikhil Kaushik

Nikhil Kaushik (Expert)

16 September 2014 you are welcome friend

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