I have to start a business on premises of other person, so as a return of use of his premises we have decided to share profit.
But if we made partnership firm more tax, tds provisions will gets attracted, so can I start this business as a proprietorship concern ? and can I pay him share of profit as a rent ? our profit sharing ratio is 40:60.
24 August 2013
If you start proprietorship business even then TDS provisions would get attracted as only those individuals who gets the work done for personal purpose are exempted from TDS provisions as you are running business you would not be exempted...moreover one benefit of paying amount as Rent would be that you can claim Rent as expenditure
24 August 2013
Instead of making partnership firm can I pay him share of profit as a rent. As he own premises, but in this case rent amount may vary as profit change year by year.
Please guide me on this.
Another question - in case of partnership firm can partners withdraw amount from partners current account. ?
24 August 2013
yes partners can withdraw amount and the same would be treated as drawings you may pay him share of profit but partnership deed should be formed.
The better option is to remunerate your LANDLORD by way of fixed salary and at the end of year you pay him the remaining (Profit minus salaries paid) amount as Bonus.
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