Professional Fees to Partners
This query is : Resolved
ATUL U ANAVEKAR
(Querist)
17 December 2010
Dear All,
Is it admissible to pay professional fees to the partners of a firm and claim a deduction from profit.
WIll the professional fees paid considered as salary for section 40.
Is it admissible to pay professional fees to the partners of a firm and claim a deduction from profit.
WIll the professional fees paid considered as salary for section 40.
Manmohan ACA, CS
(Expert)
18 December 2010
it will be treated as remuneration. partner is expected to provide his full expertise to business and shall not be remunerated for any excess service provided.
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ATUL U ANAVEKAR
(Querist)
18 December 2010
Thank you Manmohan.
Would be grateful if you could provide me with some case law on the same.
Would be grateful if you could provide me with some case law on the same.
HUZAIFA HUSSAIN
(Expert)
18 December 2010
DEAR ATUL
PARTNER CAN BE PAID EXTRA FEES IF HE APPLIES HIS SKILL WHICH OTHER PARTNERS ARE INCAPACITY TO PROVIDE. SUCH INCOME CAN BE CONSULTANCY CHARGES FOR HIS EXTRA SKILL AND NOT REMUNERATION.
PARTNER CAN BE PAID EXTRA FEES IF HE APPLIES HIS SKILL WHICH OTHER PARTNERS ARE INCAPACITY TO PROVIDE. SUCH INCOME CAN BE CONSULTANCY CHARGES FOR HIS EXTRA SKILL AND NOT REMUNERATION.
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