Partners Renumeration

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Hashim (Querist)

14 December 2009 How partners renumeration is calculated if there are 2 partners having 50% share in profit each, in a partnership firm.

Murtaza I Bhagat

Murtaza I Bhagat (Expert)

14 December 2009 On First Rs 3,00,000 of book profit or in case of loss,Rs 1,50,000 or at the rate of 90% of the book-profit, whichever is more.after On the balance of book profit,at the rate of 60%

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

14 December 2009 The instrument of partnership should necessarily contain a clause regarding payment of remuneration to partners. Such class should contain the method of quantifying the remuneration, minimum remuneration, maximum remuneration and the division of remuneratin among the partners. However the maximum remuneration allowable for income tax purpose is governed by section 40(b) of the Income tax Act,1961 which is explained the Mr. Murtaza.

Kamal sodhi

Kamal sodhi (Expert)

15 December 2009 In my opinion, The Partnership agreement should contain the clause regarding remuneration payable to partners and the procedure for calculating the same.

S.Siju Gemin

S.Siju Gemin (Expert)

15 December 2009 Remuneration of Partner from Apr 1,2010(Section 40(b)(v))
->Rs.3 lakh book profit or loss-Rs.1.5 lakh or 90% of book profit which ever is higher
->Balance book profit-60%

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