partner's remunaration

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rupesh (Querist)
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02 January 2010 HI,
In which head of income partner's remunaration should be taken?

If suppose it is taken in Business profession then any expenditure can he claim?

And what should the entry of share of profit of partner passed by partnership firm?

CA.SHAHZAD SAYYED

CA.SHAHZAD SAYYED (Expert)
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02 January 2010 Dear Rupesh
As per Sec 40(b) of IT Act, Partners are eligible for Remuneration subject to ceiling mentioned in the said section or agreed by partners in Partnereship Deed whichever is lower, Partner's Remuneration should be Debited to P/L A/c as indirect Exps. & credited to Partner's Capital A/c
2) Profit has Credit Bal. so Debit the P/L A/c so that P/L A/c get Closed & Credit to Partner's Capital A/c (in Profit Sharing Ratio)

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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02 January 2010 In the return of income of partners, remuneration from the firm need to be disclosed and offered for taxation under the head "profit and gains of business or profession".

Murtaza I Bhagat

Murtaza I Bhagat (Expert)
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03 January 2010 agree

Bimal Thacker

Bimal Thacker (Expert)
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04 January 2010 Dear Rupesh I agree with above reply, but think some part of your query is still unreply. Partner in his return can claim expenses against the remunaration and interest income received from partnership firm provided he has incurred such expenses to earn such income.

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