Professional fees to partners of llp
This query is : Resolved
02 May 2016
Dear Members,
If LLP is paying Professional Fees/Consultancy Fees to one of its Designated Partner for providing services to LLP. Is it allowable/deductible under Income Tax? Such Partner is providing Architectural Services to LLP. He is expert and providing services on Independent capacity.
May I request you to answer above query? Thanks
If LLP is paying Professional Fees/Consultancy Fees to one of its Designated Partner for providing services to LLP. Is it allowable/deductible under Income Tax? Such Partner is providing Architectural Services to LLP. He is expert and providing services on Independent capacity.
May I request you to answer above query? Thanks
03 May 2016
First of all check:
1. Deed of the partnership, regarding the status of the partner i.e. working or non-working partner;
2. If working, authorisation of payment to such partner in terms of quantum of amount;
On satisfaction point No. 1 above, no payment shall be made, apart from the amount authorised by the deed.
Whatever the payment made as per point No. 2 shall have to be complied with section 40(b) of Income Tax Act, 1961 read with section 28(v) of that Act.
1. Deed of the partnership, regarding the status of the partner i.e. working or non-working partner;
2. If working, authorisation of payment to such partner in terms of quantum of amount;
On satisfaction point No. 1 above, no payment shall be made, apart from the amount authorised by the deed.
Whatever the payment made as per point No. 2 shall have to be complied with section 40(b) of Income Tax Act, 1961 read with section 28(v) of that Act.
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