Partner's Salary.
This query is : Resolved
30 July 2010
I want to clarify one doubt relating to Partner's Remuneration.
i.e. Mr.A received Rs.360000/-p.a.from a Partnership Firm as salary, Is it fully taxable in the hands of Mr.A?
S.Jegadeesan
i.e. Mr.A received Rs.360000/-p.a.from a Partnership Firm as salary, Is it fully taxable in the hands of Mr.A?
S.Jegadeesan
30 July 2010
Yes. Fully taxable subject to individual tax limit.
30 July 2010
the disallowance portion u/s 40(b) will be taxable in the hands of partnership farm.and amount allowable undersection 40(b) will be taxable in the hands of partner.
because double taxation is not permitted.
because double taxation is not permitted.
30 July 2010
Rs. 360,000/- paid to the partner should be within limits of Section 40(b) and limits specified in the partnership deed.
If no limit has been specified then the same will be disallwed in firms income and not taxable in the hands of the partner.
If no limit has been specified then the same will be disallwed in firms income and not taxable in the hands of the partner.
Message likes :
1 times
31 July 2010
Thanks for your reply.But I couldn't come to the decision.Because different type of reply.
My query is ,
Mr. A is working in a firm & get Rs.360000/-p.a. this is the limit specified in the deed.Now that Firm's Net Profit is Rs.50000. For Firm's Tax Liability we have to arrive the Book Profit & deduct Allowable salary.But Partner's salary is separate issue. How will it(Allowable salary u/s.40(b)) affect the partner's Tax Liability.
My query is ,
Mr. A is working in a firm & get Rs.360000/-p.a. this is the limit specified in the deed.Now that Firm's Net Profit is Rs.50000. For Firm's Tax Liability we have to arrive the Book Profit & deduct Allowable salary.But Partner's salary is separate issue. How will it(Allowable salary u/s.40(b)) affect the partner's Tax Liability.
31 July 2010
You have not mentioned whether are there any partner getting remuneration.
Calculate Book Profit in the following format
Net Profit 50000.00
Add: Partner' Salary (360000+ other partner's salary)
Adjust other as per 40(b)
balance will be book Profit.
Now maximum Salary will be as follows
If book Profit is negetive 150000
If book profit is positive
then on first 3,00,000/- Rs. 150000 or 90% of book Profit, which ever is more
On balance - 60% of book Profit.
Calculate Book Profit in the following format
Net Profit 50000.00
Add: Partner' Salary (360000+ other partner's salary)
Adjust other as per 40(b)
balance will be book Profit.
Now maximum Salary will be as follows
If book Profit is negetive 150000
If book profit is positive
then on first 3,00,000/- Rs. 150000 or 90% of book Profit, which ever is more
On balance - 60% of book Profit.
Message likes :
2 times
31 July 2010
Yes and the new rates as mentioned by pyneji will be applicable only if the same has been incorporated in the partnership deed for the year or the new rates would apply from the date from which the deed has been modified not otherwsie.
Message likes :
1 times
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
- Multiple payment of self assessment tax for A Y 2025-2026
- CAPITAL GAIN REDEVELOPED FLAT
- Requirement under FEMA &RBI
- REGARDING ITR FILING QUESTION
- DUE DATE FOR ITR FILING
- Old Traces Portal
- WHERE I SHOW GST 0% INVOICE IN GSTR1 (EITHER TABLE 7 OR TABLE 8)
- Query regarding reporting of exempt foreign remuneration in ITR
- GST ISD Query on various AMCs
- Query regarding TDS on EPFO Higher Pension Arrears- under wrong section
- GST REGISTRATION REQUIRED TO DIAGNOSTIC UNIT
- Concept of Vendor and customner reconciliation
- Mistake in e-invoice identified after 24 hours
- EXPORT PAYMENT
- NRI ITR2 account in 2025-26.
- Query regarding reporting of exempt foreign remuneration in ITR (AY 2026-27)
- FEMA/RBI treatment — Amazon.ca arbitrage (US buy, Canada sell, goods never enter India)
- Goods return by customer
- INWARD REMITTANCE FOREIGN
- CPC and SAC
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
