Tax treatment of commission and interest income for firms
This query is : Resolved
Ankit Sanghvi
(Querist)
22 March 2017
A partnership firm has two source of income, interest on loans advanced and commission for helping procuring loans to clients.
What would be tax treatment for such Firms??
Whether normal deduction in respect of salary and interest to partners u/s. 40(b) shall be allowed??
What would be tax treatment for such Firms??
Whether normal deduction in respect of salary and interest to partners u/s. 40(b) shall be allowed??
CA DHAVAL MISTRY
(Expert)
23 March 2017
Yes.. Allowed as the commission income is treated as business income and remuneration to partners and interest on partners capital is allowed subject to provision of income tax act. Interest paid to finance the loans and advances also allowable expenditure
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Ankit Sanghvi
(Querist)
23 March 2017
Sir,
Would the firm's income get attracted to provision u/s 44AD, with respect to interest incomes earned by firm.
Commission income fall out of purview of sec. 44AD so question doesn't arise for such source of income.
Would the firm's income get attracted to provision u/s 44AD, with respect to interest incomes earned by firm.
Commission income fall out of purview of sec. 44AD so question doesn't arise for such source of income.
Dhirajlal Rambhia
(Expert)
24 October 2021
Due to commission income firm cannot opt for presumptive assessment u/s. 44AD of the act.
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