Remuneration to partners

This query is : Resolved

Guest

Guest (Querist)

11 November 2011 Is it mandatory to claim maximum possible partner's remuneration based on book profits even if it means that there is loss in the P & L a/c after the remuneration is claimed?
Or can the partners choose to claim less remuneration? If they claim less, then what will be taxable in their hands?
As per partnership deed it is mentioned that remuneration should be as per the provisions of IT Act.
Also can the partners choose to claim less interest on capital ?(as per partnership deed 12%)

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
Follow

11 November 2011 Remuneration and interest to working partner's should be necessarily in accordance with the provisions of the partnership deed and subject to the conditions laid down in section 40(b) of the Income tax Act,1961.
Vague drafting like 'should be as per the provisions of IT Act' warrants disallowance vide CBDT Circular 739 dated 25/03/1996 reported in 218 ITR (St) 131.

Message likes : 1 times

Guest

Guest (Querist)

11 November 2011 Thank you for the reply, but my Q is that whether the partners can claim less remuneration/ interest than that mentioned in partnership deed?

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

Mohammad Abdu Fayaz

Sidhartha sankar pillai

Anoop KK

Srikanthan S

Santosh Behera

Subscribe Now

Remuneration to partners

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

GST CONSULTANCY

CA Final

Accountant

Senior Executive

GST CONSULTANT

Manager- Finance and Compliance