Salary to partners
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
06 April 2012
How is Salary amount derived at from the profit of an partnership firm?
What is the implication of withdrawal from partner's current account, which represents the portion of Net Profit after payment of Income Tax by the Partnership firm?
What is the implication of withdrawal from partner's current account, which represents the portion of Net Profit after payment of Income Tax by the Partnership firm?
CA. Nitin Agrawal
(Expert)
06 April 2012
PARTNERS CURRENT ACCOUNT:
These are used to deal with the regular transactions between the partners and the firm
ie,matters other than those sufficiently fundamental to be dealt with through the capitalaccounts. Most commonly these are(a) share of profits, interest on capital and partners' salaries usually computedannually(b) monthly drawings against the annual share of profit.
Max. remuneration allowed to partners will be as under as per sec 40(b):
On the First three lakh of the Profit or In case of Loss: 150000 or 90 % of profit which ever is more.
On balance profit:60% of the profit
Further there is a case law of High court which held that remuneration to partners allowed even partnership does not provide for the same.
Hope that the query is solved....
Now Cheers...
Regards
These are used to deal with the regular transactions between the partners and the firm
ie,matters other than those sufficiently fundamental to be dealt with through the capitalaccounts. Most commonly these are(a) share of profits, interest on capital and partners' salaries usually computedannually(b) monthly drawings against the annual share of profit.
Max. remuneration allowed to partners will be as under as per sec 40(b):
On the First three lakh of the Profit or In case of Loss: 150000 or 90 % of profit which ever is more.
On balance profit:60% of the profit
Further there is a case law of High court which held that remuneration to partners allowed even partnership does not provide for the same.
Hope that the query is solved....
Now Cheers...
Regards
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Depreciation Chart Companies Act
- GST Audit whether Govt Companies are exempt?
- PTRC Show Cause Notice on Email
- Unable to File TDS Q2 Return – New TRACES Portal Error
- Capital Gail Exemption Certificate
- Taxation of crypto futures in India Fy 2026- 2027
- EPF ECR NEW RULES Sep 17th 2026
- Not ordinarily resident having partnership income in India and salary in USA is any form to filed be
- Issuing of delivery challan by seller of goods
- MSME disclosure and disallowance
- Accounting treatment of AMC alongwith the purchase of Laptop
- GST Treatment of Purchases with GST Paid where Outward Supplies of Manufactured CattleFeed Exempt
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
