Taxation of Partnership Firm

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vanita (Querist)
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03 March 2009 If a partnership firm is deriving Income from House Property and it is the only source. In this case, is the salary paid to partners allowed?
Else whatz the tax treatment for same?

CA LOKESH KASAT, FCA, M.Com

CA LOKESH KASAT, FCA, M.Com (Expert)
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03 March 2009 Dear Vanita,
For the purpose of Income Tax Income from House Property is Seprate head and its treatment will done by applying the provision of Section 22 to 27.
and For partner salary purpose you have too kept in mind the provision of Section 40(b) i.e. Max remuneration allowed to partners. and in case when Assesee, here firm, has no other income other than HP, so max. remuneration will be 50,000. and it will be shown as loss under the head B&P. and now it will be come under the provison of Set off and Firm can set off the same.

vanita

vanita (Querist)
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03 March 2009 Thanks a lot Sir...

CA.MANOJ LAMBA

CA.MANOJ LAMBA (Expert)
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03 March 2009 if a firm is having a income from house property only, then no deduction for partner salary is premissable.

vanita

vanita (Querist)
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04 March 2009 Is there any clarification for the same?

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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22 June 2009 While computing the income from house property in this case, it is assumed that all the expenses are allowed.
So, salary will be taxable in the hands of partner.
Citation - Shree Bhagwan Sales Pvt.Ltd

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