07 December 2017
Firm started on 1.4.16 with 2 partner. Introduced capital of 50 lakhs each. At the year end firm paid intt on capital@ 20% only and didn't paid any remuneration. Firm will be allowed intt on Cap @12% and disallowed @8%. each partner is getting 10 lakhs as intt. there is no other income except intt on cap in hand of partner
I have dought regarding the taxability in the hand of partner. plz discuss tax liability in their hands
07 December 2017
As per proviso to section 28(v) , Rs. 6,00,000/- (12% of 50 lakhs) has to be offered by each partner in their individual return under the head ' income from business'.
08 December 2017
THE CONCLUSION IS THAT PARTNER HAVE TO PAY TAX ON INCOME RECEIVED UPTO 12% OF INTT ON CAPITAL. AFTER 12% PARTNERS ARE NOT TAXABLE AT ALL IRRESPECTIVE OF THE AMOUNT OF INTT. IN MY QUESTION 8% WILL NOT BE TAXED TO PARTNER BUT ONLY THE FIRM.. SAME WILL BE IN THE CASE OF SALARY. OK
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