Tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

20 June 2013 Dear Sir,

Net profit after deducting salary and interest to partners comes to Rs. 20000/- and income tax thereon comes to Rs. 6180/-.

Suppose there is two 50-50 ratio partners, then I should debit Rs. 3090/- from each partners capital a/c
or
I should deduct it from Rs. 20000/- and remaining Rs. 13820/- to be credited equally into their capital a/c ie. Rs. 6910/- in one's and rest 6910/- in other one's.

Please clarify.

Rupesh Jain

Rupesh Jain (Expert)
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20 June 2013 second option is more logical due to tax liability of firm will bear firm . and after tax amount will distribute in partners a/c

Querist : Anonymous

Querist : Anonymous (Querist)

20 June 2013 Other experts what is your opinion ?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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22 June 2013 2nd option is fine. net profit after tax can be distributed between partners

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