Remunaration to huf partner
This query is : Resolved
NIRAV SAVLA
(Querist)
30 September 2011
IN A PARTNERSHIP FIRM IN WHICH HUF IS ONE OF THE PARTNER.
CAN THAT FIRM GIVE REMUNARATION TO HUF?
IF YES,
WHETHER IT IS TAKEN AS INCOME OF HUF
OR
INCOME OF KARTA?
CAN THAT FIRM GIVE REMUNARATION TO HUF?
IF YES,
WHETHER IT IS TAKEN AS INCOME OF HUF
OR
INCOME OF KARTA?
Preety Parik
(Expert)
30 September 2011
The firm cannot pay remuneration to HUF.However any member of HUF, in his individual capacity can have remuneration from the firm.
The firm cannot pay remuneration to HUF.However any member of HUF, in his individual capacity can have remuneration from the firm.
30 September 2011
Yes, remuneration can be paid to all the partners irrespective of their status.
Although, the Karta is the representatve of the HUF, The remuneration received by the HUF will be the income of the HUF taxable under the head Profits or Gains from Business or Profession.
Although, the Karta is the representatve of the HUF, The remuneration received by the HUF will be the income of the HUF taxable under the head Profits or Gains from Business or Profession.
NIRAV SAVLA
(Querist)
30 September 2011
CAN ANY ONE OF YOU PROVIDE ME ANY REFERENCE OR CASE LAW, ETC.
Preety Parik
(Expert)
30 September 2011
A HUF can become a partner in a firm only through its katra. CIT v. Seth Govindram sugar Mills (1965) 57 ITR 510 (SC).
When karta is a partner in a partnership firm gets salary then Unless the remuneration has direct nexus with investment of funds of the family, it will be Treated as personal income of katra. Laxman Das v. CIT (1982) 138 ITR 628/(1983) 12 Taxman 58 (all).
When a member who is a partner in a firm gets a salary then also It is his individual income. Unless it is the part of the return on investment of HUF. CIT v. Trilok Nath Mahrotra (1998) 98 Taxman 462 (SC).
When karta is a partner in a partnership firm gets salary then Unless the remuneration has direct nexus with investment of funds of the family, it will be Treated as personal income of katra. Laxman Das v. CIT (1982) 138 ITR 628/(1983) 12 Taxman 58 (all).
When a member who is a partner in a firm gets a salary then also It is his individual income. Unless it is the part of the return on investment of HUF. CIT v. Trilok Nath Mahrotra (1998) 98 Taxman 462 (SC).
06 October 2011
When karta is a partner in a partnership firm gets salary then Unless the remuneration has direct nexus with investment of funds of the family, it will be Treated as personal income of katra. Laxman Das v. CIT (1982) 138 ITR 628/(1983) 12 Taxman 58 (all).
i.e. Huf is not an active partner so it can not take remunaration it take only profit and interest from firm
i.e. Huf is not an active partner so it can not take remunaration it take only profit and interest from firm
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