Regarding Remuneration to partners
This query is : Resolved
26 December 2024
1. There is maximum limit for remuneration to partners?
2. Then it is any provision to maximum limit of remuneration to each partner?
3. If there is 2 working partners in firm and other 10 is sleeping partners, then remuneration can be distributed among all 12 partners or 2 working partners only?
2. Then it is any provision to maximum limit of remuneration to each partner?
3. If there is 2 working partners in firm and other 10 is sleeping partners, then remuneration can be distributed among all 12 partners or 2 working partners only?
26 December 2024
1. The following is the highest amount that can be paid under Section 40(b):
A. First Rs.3,00,000 of book profit or loss ..... Rs.1,50,000 or 90% of the book profit (whichever is higher)
B. Remaining balance of book-profit ........ 60% of the book-profit
Here, The net profit stated in the profit and loss account, calculated by the guidelines in chapters IV–D, plus the amount of compensation paid to partners, which is allowed as a deduction in the profit and loss account, is known as book profit.
2. This limit relates to the total remuneration of all partners, not per partner. The share would be as per partnership deed.
3. The only person who should receive such compensation is the working partner. In above referred case, only two working partners can earn the remuneration.
A. First Rs.3,00,000 of book profit or loss ..... Rs.1,50,000 or 90% of the book profit (whichever is higher)
B. Remaining balance of book-profit ........ 60% of the book-profit
Here, The net profit stated in the profit and loss account, calculated by the guidelines in chapters IV–D, plus the amount of compensation paid to partners, which is allowed as a deduction in the profit and loss account, is known as book profit.
2. This limit relates to the total remuneration of all partners, not per partner. The share would be as per partnership deed.
3. The only person who should receive such compensation is the working partner. In above referred case, only two working partners can earn the remuneration.
26 December 2024
Amount of remuneration is mandatory in accordance to profit sharing ratio as per partnership deed or can be distributed within maximum limit in any ratio?
27 December 2024
No, it should be as per shares declared in Partnership. Partnership deed can be amended for any such change/s.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Treatment of Pension ?annuity returns on PMVY
- Soyabean hsn code and gst rate
- ITR filing- non tax audit cases- Asstt.Year 2026-2027
- CA IPCC Registeration in 2012, Is my registration Active or Expired
- Last year TDS Claim
- Long Term Service award taxability in hands of company
- Free lancer income
- What is provisional receipt number for generation of form 16A
- AY 26-27 ITR-4 FILING U/S 44-ADA
- Plot of land. Cost of Acquisition
- Form 27Q Correction statement taking too long to update on IT Portal
- ITR selection for salaries and capital gain less than L
- Showing Gift from relative in ITR for this year
- Gst invoice numbering and delivery challan numbering
- Standard Deduction claim for EPFO Pension and ICICI Prudential Life Annuity
- Small dealers gst returns filing
- Sales amount in Gstr1
- CG after sale of flat
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
