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Professional fees to partners of llp

This query is : Resolved 
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(Querist)
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
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CA CMA CS Ram Pavan Kumar Melam

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CA CMA CS Ram Pavan Kumar Melam (Expert)
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.
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