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SANJEEV KUMAR (PROPRIETOR)     21 September 2021

Applicability of Section 44AD for Partnership Firm

Dear all,

Came across a partnership firm having turnover of 60 lakhs and profit nullifying by way of debiting interest on partners' capital and remuneration to partners in P & L A/c. Are provisions of section 44AD not attracted as presumptive profit is to be considered before aforesaid interest and remuneration to partners?


CA. Sanjeev Kumar

 2 Replies

Dhirajlal Rambhia

Dhirajlal Rambhia (SEO Sai Gr. Hosp.)     21 September 2021

In case, sec 44AD(4) not attracted...... sec. Sec.40(b) gets attracted.

veerendar singh

veerendar singh (tax consultant)     21 September 2021

Ca sanjeev ji you have mistaken. 44ad profits are after remuneration and interest expense.

since the profit is sweeped by the interest and remuneration, the firm will have to get audit done.

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