what is sec 40b and what is the applicability of it.
what is the amendement and from when it is applicable
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Section 40 (b) dis allowance in the case of partnership firm i) Interest paid to the partner of the firm is not deductible unless the following conditions are satisfied 1) It should be authorised by and in accordance with the partnership deed 2) It should be relate to the period falling after the partner ship deed 3) It should not exceed 12% of p.a similar rate of interest. Dis allowance of interest is subject to the following condition A) If a person is a partner in his representative capacity and receive interest in the firm and if he receive the interest in his individual capacity from the firm such interest should not be disallowed. B) If a person who is a partner in his individual capacity and receive interest for and on behalf of some one else from the firm in which he is a partner such interest should not be disallowed. ii) Any amount paid by way of salary, bonus,commission or remuneration by a firm to a partner is not deductible in the computation of income of the firm unless the following condition are satisfied 1) It should be authorised by and in accordance with the partnership deed 2) It should be relate to the period falling after the partner ship deed 3) It should be within the prescribed limits. The prescribed limits are as follows 4) It should be paid to a working partner |
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