Partnership Firm & 44AD
This query is : Resolved
10 September 2024
Can we declare income u/s.44AD of a newly formed partnership firm for FY 2023-24 ? And can we also further deduct Salary and Interest on capital paid to partners in a non-audit case ?
10 September 2024
1. Yes,
2. Not from the presumptive income.
2. Not from the presumptive income.
10 September 2024
Thanks sir. If I conduct audit of the said firm, then whether Interest and salary to partners will be allowed as deduction or not ?
10 September 2024
Audit is not the criteria. If you declare income under normal assessment (tax audit may or may not be applicable), in that case you can deduct the salary & interest paid to partners as expenditures of the firm.
10 September 2024
Thanks for your quick reply sir. But I could not understand "normal assessment". If I prepare detailed profit and loss a/c and B/sheet, without audit, may I show the salary and interest to partners as expenses ?
10 September 2024
Yes.
Normal assessment in a way means 'not opting for sec. 44AD IT act (or presumptive assessment)'.
Normal assessment in a way means 'not opting for sec. 44AD IT act (or presumptive assessment)'.
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