How to workout remuneration for ay 2017-18

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TARIQUE RIZVI (Querist)

01 February 2018 Sir the book profit is Rs 2,69,555 in such case how to workout the remuneration to working partners for the Ay 2017-18. Further I would like to know how to workout interest on capital. Interest on capital should be on opening balance or on closing balance. Please guide me and oblige.

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)

01 February 2018 1.Remuneration shall be allowed as deduction only if it is paid to working Partner
2. Remuneration must be written /authorized and should be quantified in partnership deed
3. Remuneration must be related to the period after the partnership deed
4. Interest paid to partner should not exceed 12%
5. It should not exceed limits specified in section 40(b)a.
On first 3 lakhs of book profit or loss Rs 1,50,000 or 90% of book profits
(whichever is higher)
b. On the balance book profit 60% of book profit

Interest capital may be as per terms of deed or on opening capital

RAJA P M

RAJA P M (Expert)

02 February 2018 Yes... I agreed to Mr KAVIRAJA ADDANGADI Sir., Also in AY 17-18 the partners remuneration will be changed... Except Tax Audit we will show the Profit and Pay Tax 8% or above...

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