IT RETURN

Save Share

This query is : Resolved

Quick Summary

A partnership firm registered in November 2019 with three partners, each investing Rs. 400,000, faced issues opening a bank account before GST registration. After obtaining GST registration in January 2020, the firm filed nil returns until March 2020 due to no transactions. The query asks whether the Income Tax Return should be filed as nil or if interest on capital and partner remuneration should be calculated up to March 2020, especially since the capital wasn't deposited in the bank account. Advice suggests filing a return with losses, accounting for expenses like registration, rent, and professional fees. It's also noted that salary and interest payments to partners are permissible based on the partnership deed, and returns are mandatory for carrying forward losses. A key point raised is the impossibility of providing for interest, expenses, or salary if capital wasn't deposited by March 31st.

raghavendra b

raghavendra b (Querist)
Follow

06 May 2020 DEAR SIR,

ONE PARTNERSHIP FIRM REGISTERED AS ON NOVEMBER 2019. NO OF PARTNERS 3. EACH PARTNER TO BE DECIDED INTO INVEST RS. 400000/- IN THE FIRM. BUT THE CAPITAL AMOUNT OF THE PARTNER SHALL BE DEPOSITED IN THE BANK ACCOUNT. BECAUSE BEFORE GST REGISTRATION BANK ACCOUNT COULD NOT BE OPENED IN ANY BANK. NOW GST REGISTRATION TAKEN AS ON JAN 2020. STILL THERE IS NO TRANSACTION AND FILED AS NIL RETURN TILL MACH 2020.

MY QUESTION IS WHETHER INCOME TAX RETURN OF THE FIRM TO BE FILED AS NIL OR IS THERE ANY INTEREST ON CAPITAL AND REMUNERATION OF THE PARTNERS TO BE CALCULATED UP TO THE MARCH 2020?.
BECAUSE THERE IS NO CAPITAL AMOUNT SHOWN IN THE BANK ACCOUNT.

PLEASE CLARIFY ME

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
Follow

06 May 2020 You can open current account with firm registration and partnership deed ,

You can file tax return with loss , since you have incurred registration and incidental expenses , rent , electricity , maintenance exps , professional fees etc pertains to firm .

You need to have firm bank account to file income tax return .

raghavendra b

raghavendra b (Querist)
Follow

07 May 2020 thank you for your reply sir, can we adjust interest on capital on accrue basis and salary for partners.

regards

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
Follow

07 May 2020 Salary to partner allowed as per income tax act , for loss maximum allowed 150000/- profit upto 3 lakh 90% allowed above 3 lakhs 60% profit can be apprtioned as salary

Prakash Kochar

Prakash Kochar (Expert)
Follow

07 May 2020 Other than HUF or individual are under compulsion to file return.
Payment of interest and remuneration depends on terms and conditions of partnership deed.

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)
Follow

08 May 2020 Yes filling of returns is mandatory if you would like to carry forward the losses and claim to set off the same in coming years. Moreover if the partners did not provided the capital in the bank account till March 31st how would you provide for Interest, expenses or even salary to them ?

raghavendra b

raghavendra b (Querist)
Follow

08 May 2020 thank you for all yours replies, sir

regards

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now