Partners salary in partnership firm
This query is : Open
16 March 2015
Hello Everyone !
Please answer my below question:
Can the partner's salary be enhanced under section 40b if the profits of the partnership firm increased during assessment?
Please answer my below question:
Can the partner's salary be enhanced under section 40b if the profits of the partnership firm increased during assessment?
16 March 2015
even if u enhence it still the limit is defined under sec 40(b)
https://www.charteredclub.com/section-40b/
https://www.charteredclub.com/section-40b/
16 March 2015
Thanks Tushar. But my query is a bit different. According to me, I cannot enhance salary since the revised profit is the ASSESSED PROFIT and not the DECLARED PROFIT. So according to me, i cannot change the salary amount once the assessment is done.
16 March 2015
sec 40B limit cannot be changed as it has been already set out by govt bu virture of provision,so in practical life you can increase and pay the partner but for income tax purpose the limit needs to be followed.
16 March 2015
Tushar, I know that i cannot change the limit of sec 40b but I feel I cannot increase salary since the profits are the ASSESSED profits. So even if the profits are enhanced, my salary will be the same.
For eg:
While filing return:
Net profit before sal : 20,00,000
Salary: 8,00,000 (assume this is as per 40b)
While assessment:
Net Profit before sal : Rs. 2500000/- (i.e. increased by 5L)
still my salary will be Rs. 8,00,000/-
and wont change
For eg:
While filing return:
Net profit before sal : 20,00,000
Salary: 8,00,000 (assume this is as per 40b)
While assessment:
Net Profit before sal : Rs. 2500000/- (i.e. increased by 5L)
still my salary will be Rs. 8,00,000/-
and wont change
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