09 November 2017
No, this is not possible because as per section 40b of income tax act there is a bar/limit on salary based on profits and interest paid on capital maximum 12%p.a and salary is discussed as under
- on First 3 lakhs of book profits or in case of loss - 90% of book profits or 150000 whichever is higher
09 November 2017
As per Indian Partnership Act, the profit can be distributed in full... no any problem.....But as per Income Tax Act, the allowable would be as per section 40b
09 November 2017
the firms are as such governed by the indian Partnership Act. So far as income tax is concerned, you can show the "dis allowed" by way of computation sheet.
CAclubindia
