Remuneration to partners
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
25 February 2013
There are 2 partner in a firm.One partner is shown as sleeping partner for the last 3 years.can this year remuneration to partners can be divided between sleeping partner and working partner by showing sleeping partner as working partner?
25 February 2013
As per the income tax act only working partner(s) is/are eligible to get the remuneration and allowable as deduction subject to the act. Remuneration paid to sleeping partner doesn't allowed and not eligible for deduction as per IT act.
OM SAI SRI SAI JAI JAI SAI
OM SAI SRI SAI JAI JAI SAI
Querist : Anonymous
Querist :
Anonymous
(Querist)
25 February 2013
but can we show them as working partner as before 3 years he was working partner only?
25 February 2013
If such partner is became as working partner during the year then eligible for remuneration.
OM SAI SRI SAI JAI JAI SAI
OM SAI SRI SAI JAI JAI SAI
25 February 2013
Remuneration to 'working partners' are allowed strictly according to the provisions of the partnership deed read along with section 40 (b) of the Income tax Act,1961. So ,if you want to pay remuneration to the sleeping partner, first you have to amend the partnership deed ,particularly the remuneration clause,so as to make him 'working partner'.
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