Separate assessment for partner of a firm.
This query is : Resolved
03 November 2013
Will a partner of a firm be assessed again to determine his taxable income after assessment of his firm's income? If yes, income of the firm is taxed twice, firstly in the hands of the firm and secondly in the hands of such partner. Isn't it?
03 November 2013
i) Share of profit of a partner is exempted u/s. 10(2A) of the Income tax Act,1961. Hence, income is not taxed twice.
ii) If salary and or interest is paid by the firm to the partner, it is assessed in the hands of the partner being an allowable expense for the firm subject to the limits u/s 40(b) of the said act.
ii) If salary and or interest is paid by the firm to the partner, it is assessed in the hands of the partner being an allowable expense for the firm subject to the limits u/s 40(b) of the said act.
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03 November 2013
Thank you sir. My doubt is cleared.
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