30 March 2023
As a working partner, you are entitled to receive remuneration from the partnership firm(s) for the services rendered by you to the firm(s). However, the payment of remuneration to a partner is subject to certain conditions and limitations under the Income Tax Act, 1961.
According to the Act, the amount of remuneration paid to a partner of a firm should be allowed as a deduction for the firm, only if the following conditions are satisfied:
The payment is made genuinely for the services provided by the partner to the firm. The payment is made in accordance with the partnership deed. The amount of remuneration paid should not exceed the amount specified in the partnership deed or the amount calculated as per the provisions of the Act, whichever is lower. Therefore, if both firms have provided for payment of remuneration to you in their respective partnership deeds, and the payment is made in accordance with the provisions of the Act, you can receive remuneration from both firms. However, the total amount of remuneration received by you from both firms should not exceed the limit specified in the partnership deeds or the limit calculated as per the provisions of the Act, whichever is lower.