I want to know that does partner salary admissible when we deduct it from gross profit ? or it should be deducted from net profit after payment of tax?
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AA-34-Partner Salary Deduction (Fir Dobara)
Replies (5)
Partner salaries are typically deducted from the partnership's net profit, not the gross profit, and this deduction is done before calculating taxable income. The net profit, which includes partner salaries as expenses, is the basis for taxation and partner distributions. Specific rules may vary by jurisdiction, so consult a tax advisor for guidance.
Yes I agreed the above said reply.
Dear Edward K Gill,
Thanks for your informative reply.
please confirm that should we consider taxable income of those profit which remsins after deducting of partners salary ?
Thanks for your informative reply.
please confirm that should we consider taxable income of those profit which remsins after deducting of partners salary ?
kind response awaited from Sir Edward K Gill.
Dear Edward K Gill Sir,
Your kind response awaited on above.
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