Section 44ad
This query is : Resolved
17 March 2012
If a partnership firm claim his profits u/s 44AD I.e. 8% of gross turnover... Then can it claim remuneration to partners separately after taking profits equal to 8% of turnover....?
Guest
Guest
(Expert)
17 March 2012
Deduction for partner's remuneration will be allowed in such case. Deduction under section 30 to 37 are deemed to allowed in such case where as partner's remuneration is allowed under section 40b.
17 March 2012
Yes, it can separately claim partners' remuneration i.e. after calculating 8% of profits on gross turnover; remuneration can be deducted and tax is to be paid thereon.
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17 March 2012
Thanks for rep sir....
But after providing remuneration the profit will decrease from 8%, then shall the liability of tax audit arise on it....?
Because acc. To sec 44 AB if the assessee claim the net profits below 8% of turnover then tax audit is mandatory in that case..
And here is net profits not the book profits...
But after providing remuneration the profit will decrease from 8%, then shall the liability of tax audit arise on it....?
Because acc. To sec 44 AB if the assessee claim the net profits below 8% of turnover then tax audit is mandatory in that case..
And here is net profits not the book profits...
17 March 2012
No.
.
In the instant case; the assessee is not showing net profits below 8%.
.
The remuneration to partners are specifically allowable under the statue.
.
Conceptually; these are distribution of profits.
.
In the instant case; the assessee is not showing net profits below 8%.
.
The remuneration to partners are specifically allowable under the statue.
.
Conceptually; these are distribution of profits.
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