Salary to partner

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Komal Mistry (Querist)
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18 May 2013 In any case, if any salary is given to partner of a firm, whether such salary is taxable under the head salary in his hand or is taxable as income from PGBP?

and in which cases, such salary to partner is taxable under the head salry?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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18 May 2013 For Salary income need to taxable under salary, there should be a employer and employee relationship, since the partner itself owner of the business it is not a salary income hence not taxable under salary

It is business income only. how ever it is part of share of income from business,hence it is not taxable in the hands of partner.

Suresh Mittal

Suresh Mittal (Expert)
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19 May 2013 Salary to partner is taxable as Income from PGBP. It is taxable in the hand of partner because in the firm, deduction of salary, calculated u/s 40b, is available.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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19 May 2013 Partner's salary is covered under section 28(v) of the Income tax Act,1961 and has to be offered / assessed under the head PGBP.

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