Regarding : partner remuneration.

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Lakhan Madne (Querist)

19 May 2016 Dear Experts,
I want asking about partner remuneration. I doing working in partnership firm and i want calculate partner remuneration and also don't know which formulas use in partner remuneration. Therefore i need your help please suggest to me regarding partner remuneration calculation and also explain meaning of partner remuneration.

Many Thanks to all Experts in advance.

Thanks & Regards
Lakhan Madne

Amol S Joglekar

Amol S Joglekar (Expert)

19 May 2016 https://www.incometaxindia.gov.in/Pages/acts/income-tax-act.aspx

you can go through 40 b of income tax act

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Abhishek Ranjan Singh

Abhishek Ranjan Singh (Expert)

19 May 2016 As per section 40(b)(v) any payment of remuneration to any partner who is a working partner, which is authorized by, and is in accordance with, the terms of the partnership deed and relates to any period falling after the date of such partnership deed in so far as the amount of such payment to all the partners during the previous year exceeds the aggregate amount computed as here under will be disallowed:

(a) on the first Rs.3,00,000 of the book-profit or in case of a loss Rs.1,50,000 or at the rate of 90 per cent. of the book-profit, whichever is more;

(b) on the balance of the book-profit at the rate of 60 per cent.

Explanation 3 to section 40(b) defines “book-profit” as to mean the net profit, as shown in the profit and loss account for the relevant previous year, computed in the manner laid down in Chapter IV-D as increased by the aggregate amount of the remuneration paid or payable to all the partners of the firm if such amount has been deducted while computing the net profit.

Abhishek Ranjan Singh
ARS Solutions
www.arssolutions.co.in
+919022838615

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Lakhan Madne

Lakhan Madne (Querist)

20 May 2016 Dear Singh Sir,

Many thanks to you for replay and also guide. Now our company net profit is 1,64,000/- in case i what to do ? and two partner in my company as per partnership deed and both are working in firm. How computing the partner remuneration. Please guide to me.

Many Thanks to You for support to us.
Best Regards
Lakhan Madne

Abhishek Ranjan Singh

Abhishek Ranjan Singh (Expert)

20 May 2016 Total allowed Remuneration :
=164000*90% or 150000 which ever is more
=147600 or 150000 which ever is more
=150000

As there is two working partner so allowed remuneration Rs. 75,000/- (150000/2) per partner.

Abhishek Ranjan Singh
ARS Solutions
www.arssolutions.co.in
+919022838615

Note : If you find our reply useful. Please Score us by clicking on "THANK USER"

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