Tax on partnership

This query is : Resolved

B.P. SRIDHAR (Querist)
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02 February 2013 SIR
IF IN A PARTNERSHIP WIFE & HUSBAND ARE PARTNERS. ONLY HUSBAND HAS LESS SALARY DUE TO WHICH THE FIRM IS LIABLE TO PAY HUGE TAX. WHAT ARE THE WAYS TO REDUCE TAX IN SUCH CASE. CAN WIFE CREDIT AMOUNTS TO HER ACCOUNT WHICH WILL BEAR INTEREST AND REDUCE TAX. PL CLARIFY OR ANY OTHER WAYS.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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04 February 2013 HUSBAND'S REMUNERATION IS LESS- WHY ?
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WHAT ARE THE TERMS SET OUT IN PARTNERSHIP DEED REGARDING REMUNERATION TO WORKING PARTNER ?
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WHETHER WIFE CAN CONTRIBUTE EXTRA CAPITAL OR NOT ? SEE HER PERSONAL BALANCE SHEET.
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BY INCREASING THE INCOME OF WIFE , WHETHER HER SLAB OF 30% GETS ACTIVATED ? ANALYSE.
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C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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23 July 2013 Interest up to 12% is allowed on capital of the partners and if the partnership deed provides to charge interest then yes it can be charged/

Partners salary should also be provided in the partnership deed and the limit has been fixed under the income tax act for maximum salary if the maximum salary is not given to the partners then it can be given but by taking salary and interest the partners income exceeds the Baraket of 30% then it is all the same whether you pay tax in Partnership or in individual hands

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