Remuneration and interest to partner
This query is : Resolved
28 March 2017
According to section 44AD what is the treatment of remuneration and interest paid to the partners when it assumed that all exp including remuneration and interest have deducted from presumptive income @ 8%.
Is remuneration and interest taxable for partners or not ?
remove doubts
Is remuneration and interest taxable for partners or not ?
remove doubts
28 March 2017
Remuneration and interest can be deducted from 44AD profit up to the asst yr.2016-17. Such amount is taxable in the hands of the respective working partner.
But from the asst yr. 2017-18, the benefit of deduction mentioned above is withdrawn by virtue of the omission of the proviso to section 44AD (2) w.e.f 1.4.2017.
But from the asst yr. 2017-18, the benefit of deduction mentioned above is withdrawn by virtue of the omission of the proviso to section 44AD (2) w.e.f 1.4.2017.
28 March 2017
Yes, It is taxable for partners. It has been assumed that Firm is claiming the deduction of interest and remuneration being paid to partners. So since firm is claiming deduction, it is taxable for the partners.
28 March 2017
Thanks, in such case why firm has to pay remuneration & interest to partners ???
Hence firm declared income u/s 44AD on presumptive basis then why is the need of giving remuneration & interest to partners.
Hence firm declared income u/s 44AD on presumptive basis then why is the need of giving remuneration & interest to partners.
28 March 2017
why firm has to pay remuneration & interest to partners ??? Hence firm declared income u/s 44AD on presumptive basis then why is the need of giving remuneration & interest to partners in AY 2017-18.
28 March 2017
Well, if it is written in partnership deed then the firm has to pay interest and remuneration. But if nothing in mentioned in deed then no need to pay interest and remuneration.
If interest and remuneration are not required as per deed and firm is declaring income as per 44AD then no need to give interest and remuneration.
If interest and remuneration are not required as per deed and firm is declaring income as per 44AD then no need to give interest and remuneration.
28 March 2017
Sir, My question is that when firm does not give remuneration and interest but income declare under presumptive basis then what is taxability for partners can it will assume that remuneration & interest paid by the firm and same will be chargeable to tax in the hands of the partners ??
24 October 2021
Once taxable under firm account, the balance amount can be distributed to partner as capital distribution, which is non taxable to partners.
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