Nett profit and interest on capital
This query is : Resolved
22 July 2016
IF NETT PROFIT IS RS ONE LACS INTEREST ON CAPITAL IS RS 2 LACS AND FINALLY NETT LOSS OF RS ONE LACS ARRIVES IN PROFIT & LOSS ACCOUNT WHETHER THIS LOSS OF RS ONE LACS IS ALLOWED OR DIS-ALLOWED PLS GUIDE ME WHAT TO DO IN THIS CASE
22 July 2016
hope, your query is with respect to Partnership firm.
The loss will be allowed.......no issues.
The loss will be allowed.......no issues.
22 July 2016
Thank you Mr Amol well one more thing I would like to know whether ITR-5 on account of Rental Income from Plant can be filed u/s 44-Ad by showing 8% net profit against the total rent receipt from Plant. Total Rent Receipt is Rs 18,00,000 ( 18 Lacs ) Nett Profit will then arrive at Rs 1,44,000/ ( 1.44 Lacs ) @ 8%
22 July 2016
yes, it can be done that way.....mind well this 8 % shall be deemed to be after interest, commission, salary, bonus and remuneration of partners.......
22 July 2016
Thanks Lot of thanks to you Amol Sir.
23 July 2016
you are most welcome.
23 July 2016
I beg to differ. Profit u/s 44AD is after deductions u/s 30 to 38 only. A firm can claim deduction for remuneration to partners u/s 40(b)
24 July 2016
Thank you Mr Sunit but someone has advised me to do as follows:
Ay 2016-17 : ITR-5 u/s 44-AD : Partnership Firm
===================================
Gross Rental Receipt from Plant & Machinery is Rs 18,00,000 { 18 Lacs }
Nett Profit @ 8% will arrive at Rs. 1,44,000/= { 1.44 Lacs }
I have been advised that in P&L of ITR-5 remuneration or interest on capital u/s 40 (b) should not be reflected and the nett profit of Rs. 144,000/- should be reflected in P&L account in ITR-5. Later in schedule BP at point no. 31 put the total value of remuneration or interest on capital or both on account of any other allowable deduction. Pay the total tax liability if income is observed and if loss is observed, loss can be claimed. Is the adviser right or wrong ? But simultaneously remuneration or interest on capital or both should be reflected in your books of accounts so that investment of the partners as per their personal accounts should be matched with their capital account with the partnership firm.
Ay 2016-17 : ITR-5 u/s 44-AD : Partnership Firm
===================================
Gross Rental Receipt from Plant & Machinery is Rs 18,00,000 { 18 Lacs }
Nett Profit @ 8% will arrive at Rs. 1,44,000/= { 1.44 Lacs }
I have been advised that in P&L of ITR-5 remuneration or interest on capital u/s 40 (b) should not be reflected and the nett profit of Rs. 144,000/- should be reflected in P&L account in ITR-5. Later in schedule BP at point no. 31 put the total value of remuneration or interest on capital or both on account of any other allowable deduction. Pay the total tax liability if income is observed and if loss is observed, loss can be claimed. Is the adviser right or wrong ? But simultaneously remuneration or interest on capital or both should be reflected in your books of accounts so that investment of the partners as per their personal accounts should be matched with their capital account with the partnership firm.
24 July 2016
Thank you Mr Sunit but someone has advised me to do as follows:
Ay 2016-17 : ITR-5 u/s 44-AD : Partnership Firm ===================================
Gross Rental Receipt from Plant & Machinery is Rs 18,00,000 { 18 Lacs } Nett Profit @
8% will arrive at Rs. 1,44,000/= { 1.44 Lacs }
I have been advised that in P&L of ITR-5 remuneration or interest on capital u/s 40 (b) should not be reflected and the nett profit of Rs. 144,000/- should be reflected in P&L account in ITR-5. Later in schedule BP at point no. 31 put the total value of remuneration or interest on capital or both on account of any other allowable deduction. Pay the total tax liability if income is observed and if loss is observed, loss can be claimed. Is the adviser right or wrong ? But simultaneously remuneration or interest on capital or both should be reflected in your books of accounts so that investment of the partners as per their personal accounts should be matched with their capital account with the partnership firm.
Ay 2016-17 : ITR-5 u/s 44-AD : Partnership Firm ===================================
Gross Rental Receipt from Plant & Machinery is Rs 18,00,000 { 18 Lacs } Nett Profit @
8% will arrive at Rs. 1,44,000/= { 1.44 Lacs }
I have been advised that in P&L of ITR-5 remuneration or interest on capital u/s 40 (b) should not be reflected and the nett profit of Rs. 144,000/- should be reflected in P&L account in ITR-5. Later in schedule BP at point no. 31 put the total value of remuneration or interest on capital or both on account of any other allowable deduction. Pay the total tax liability if income is observed and if loss is observed, loss can be claimed. Is the adviser right or wrong ? But simultaneously remuneration or interest on capital or both should be reflected in your books of accounts so that investment of the partners as per their personal accounts should be matched with their capital account with the partnership firm.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- About TDS & Income Tax
- PPF interest-As Exempt Income disclosure
- Section 194JA & JB Income which ITR Form to use
- Scrutiny and reopening of past returns
- Pass word to open justification report for Q1 for FY 2026-27
- F & O PROFIT REPORTING FOR AY 2026-27
- Booth for sales promotion
- Type of Capital Gain
- Rental income of jointly held property
- FEMA regulation Act. for inward remitance
- TDS on Rent received on redevelopment of building
- Tax on Deemed Capital Gain
- Indian IT Portal issue in computing tax as per UK-India DTAA
- Capital Gains on sale of residential flat
- Upload Level ValidationITR3Category of Defect B/D
- PF Taxable Income
- Clarification on Tax Audit Applicability and Reporting of F&O Transactions in ITR-3
- Interest credited in FY2025-2026 & TDS therein by EPFO does not reflect in AIS or Form 26AS
- 44ad eligble money lending interest
- Taxation in the hands of Landowner under JDA
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
