Partners Remunaration

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pravin (Querist)
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22 April 2011 Sir i want to know about professional firms & business firms and there limit as per book profit
, when we cacculate the partners remuneration ?

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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22 April 2011 Remuneration exceeding the limit prescribed u/s 40(b) to be disallowed: As per section 40(b)(v) any payment of remuneration to any partner who is a working partner, which is authorised by, and is in accordance with, the terms of the partnership deed and relates to any period falling after the date of such partnership deed in so far as the amount of such payment to all the partners during the previous year exceeds the aggregate amount computed as hereunder will be disallowed:

(a) on the first Rs.3,00,000 of the book-profit or in case of a loss Rs.1,50,000 or at the rate of 90 per cent. of the book-profit, whichever is more;

(b) on the balance of the book-profit at the rate of 60 per cent.

Explanation 3 to section 40(b) defines “book-profit” as to mean the net profit, as shown in the profit and loss account for the relevant previous year, computed in the manner laid down in Chapter IV-D as increased by the aggregate amount of the remuneration paid or payable to all the partners of the firm if such amount has been deducted while computing the net profit.

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pravin

pravin (Querist)
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22 April 2011 Sir can u give me a some examples to calculated the partners remuneration as per book profit??????

or there is any site to see the examples of partners remuneration?/////////

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