26 December 2023
By permitting constitution of multiple firms with same partners and same sharing ratio one will be claiming higher remuneration from each firm as per provisions of s. 40(b) which allows 90% of first book profit upto 3 l acs. Thus, in each firm partners remuneration @90% of first 3 lacs of book profit would be allowed. They may have different firms for different branches whether or not the line of business is same .
Apart from Income Tax point of view, please provide insight from the perspective of Partnership Act, 1932.
26 December 2023
Salary received by the partners are Taxable in their hands. Higher salary attract 30% tax. Income tax no problem. Partnership Act not prohibit such partnerships. No need for any prohibition under the Act.
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