Itr 3 - schedule bp

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K G Karthikeyan (Querist)
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27 February 2013 In Sch BP of ITR 3, there is a column for expenses in relation to income from salary & interest from firm.

What deductions can be claimed in that as expense?

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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27 February 2013 The amount which is disallowed in the firms return of income for the purpose of section 40(b). For example assume there is 2 no.of partners in a partnership firm with equal sharing ratio and according to the firm each partner get the remuneration(salary) of Rs.120000 i.e total remuneration debited to P&L account of firm is Rs.240000 but according to the section 40(b) the eligible remuneration payable by the firms to its partners is Rs.150000 i.e each get the eligible of Rs.75000 and excess debited Rs.90000 is disallow in the return of income of firm i.e for each partner Rs.45000 is disallowed so such amount of Rs.45000 is already taxable in the hands of firm so it would be allowed as expenditure in the hands of Partner's individual assessment. So fill such Rs.45000 at ITR-3 Schedule BP as deductable expenditure.

As well as interest on partner's capital maximum eligible to the firm is 12%p.a in case such firm debited excess interest than 12% as interest on Partner's capital then such excess amount disallow in the hands of firm and taxable and thus such excess amount of each partner allowable as deductable expenditure.

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