SALARY TO PARTNER as a working partner

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As a working partner, you can indeed receive a salary from two different firms for services rendered. However, this is subject to specific conditions outlined in the Income Tax Act, 1961. The remuneration must be genuinely for services provided, align with the partnership deeds of both firms, and not exceed the limits set by the Act or the deeds, whichever is lower.

satish kumar Chauhan

satish kumar Chauhan (Querist)

30 March 2023 Dear experts

I am partner of two firm, can i take the salary from both firms as a working partner.

Thanks

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

30 March 2023 Yes, you can take no problem.

CA Sanat Pyne

CA Sanat Pyne (Expert)

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.

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