Partner's Remuneration U/S 40(b) of I.T.Act

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CA Sanjay Baheti (Querist)
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13 March 2010 Assesse being a Parnership Firm. As per terms of Deed Partner's remuneration shall be provided as per section 40(b) of I.T.Act. Now for the Current Year there shall be book loss before providing the same. Whether is it mandatory to provide in books the parner's remuneration subject to maximun Rs. 1,50,000/- in case of Book loss for the year ended as on 31.03.2010.

regards.

Ca Sanjay Baheti

CA Gangadhar Mishra

CA Gangadhar Mishra (Expert)
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13 March 2010 remuneration in case of loss is not mandatory in case of Partnership firms.

CA CHINTAN AJMERA

CA CHINTAN AJMERA (Expert)
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13 March 2010 Agree with expert

CA Chaitanya

CA Chaitanya (Expert)
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14 March 2010 It depends on whether it is provided in the partnership deed or not?

CA Sanjeev Kr Jain

CA Sanjeev Kr Jain (Expert)
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15 March 2010 chaitanya is correct, we need to follow partnership deed

CA Sanjay Baheti

CA Sanjay Baheti (Querist)
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15 March 2010 Dear All Experts.

I got confused as two expert's opinion says that it is not mandatory to provide partner's remuneration in books as per section 40(b) of I.t. act in case of Book Loss, while other Experts says that it
depends on the terms of deed.As i have already mentioned in my query that partnership deed specfied the same.(i.e.Partner's remuneration as per section 40(b) of I.t.Act).

Please clarify the same with best option.

Rahul Vora

Rahul Vora (Expert)
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16 March 2010 As per Section 40(b) of the IT Act, it is not mandatiry to provide for partner's remuneration in the books.
If in the pertnership deed it is mentioned that remuneration to the partners will be paid as per Sec. 40(b) of the IT Act, then you need not provide for partners' remuneration in books.
But, if it is expressly mentioned in the partnership deed, that in any case, partners are to be paid such and such remuneration, then you have to go by the partnership deed.
Hope, this clears your confusion.

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