I HAVE A CLIENT AND THE STATUS OF THE CLIENT IS PARTNERSHIP FIRM.
IN THE PARTNERSHIP DEED, THE MONTHLY REMUNERATION TO PARTNERS MENTIONED AS RS.16,000/- TO PARTNERS. HENCE AN AMOUNT OF RS.1,92,000/-(16000*12) DEBITED TO PROFIT & LOSS ACCOUNT.
WHILE COMPUTING THE TAXABLE INCOME, REMUNERATION ALLOWABLE AS PER SEC-40b COMES TO RS.2,80,000/-.
THE FIRM TAKEN REMUNERATION DEDUCTION OF RS.2,80,000/- EVEN THOUGH THE PROFIT AND LOSS ACCOUNT WAS DEBITED WITH RS.1,92,000/-.
IS THE FIRM CORRECT IN DOING SO?. PLEASE ADVICE ME IN THIS REGARD.
CAclubindia
