What is taxed in partner hands? admissible remuneration to partner or debited to pl?
This query is : Resolved
21 October 2024
what is taxed in partner hands?
rem. debited to pl of firm or admissible remuneration in firm's it return?
my view--> admissible rem. irrespective of what is debited in firm's prof loss.
Am i correct?
rem. debited to pl of firm or admissible remuneration in firm's it return?
my view--> admissible rem. irrespective of what is debited in firm's prof loss.
Am i correct?
21 October 2024
The remuneration debited to P&L is taxable in the partner's hands, regardless of whether it's fully admissible as a deduction for the firm. If the remuneration paid to partners exceeds the permissible limits under Section 40(b) of the Income Tax Act, the excess amount is not allowed as a deduction for the firm but is still taxable in the hands of the partner.
21 October 2024
that is double taxation . i wonder why no one raised this point? anyways, ty sir
21 October 2024
That is because of cap in ratio of remuneration to profit margin. It is not double taxed, but capped to derive (allowable) remuneration.
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