Partner's remuneration

This query is : Resolved

VINAY SACHDEVA (Querist)
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04 May 2012 How much Remuneration can show in balance sheet of a firm having profit Rs. 10000/- to Rs. 20000/-.

what is the tax liability of a firm for the Fin.year 2011-12 having profit of Rs. 15000/- and remuneration Rs. 180000/-. Plz. give a example how salary allowed and disallowed.

what is the procedure of increasing the salary shown in original partnership deed. and how many times we can increase it.

Vinay Sachdeva

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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04 May 2012 Q 1. You can show remuneration up to Rs. 150000.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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04 May 2012 Q.2 :
Provisions for Remuneration to working partners have been prescribed U/s 40(b)(v).

1. Net Profit after allowing Remuneration to
Partners :15000
2. Add: Remuneration to Partners : 180000
3. Book Profit 1+2 = 195000
4. Remuneration Allowable
90% of Book Profit being higher than 150000
: 175500
5. Taxable Income of the firm 3-4 =19500.

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CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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04 May 2012 The partner may decide inter se to revise the remuneration by preparing supplementary partnership deed(s) as many times as they desire during the financial year. The Act does not restrict the right to revise the remuneration. However, allowable remuneration will be decided by following the provisions of Section 40(b)(v).
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