Partners salary in partnership firm

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Anish (Querist)

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?

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)

16 March 2015 even if u enhence it still the limit is defined under sec 40(b)

https://www.charteredclub.com/section-40b/

Anish

Anish (Querist)

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.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)

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.

Anish

Anish (Querist)

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

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