pls explain how to calculate book profit in partnership firm and consideration of salary to the working partner?
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book profit
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Mr. Satish
Book Profit for the purpose of section 40 means the the net profit computed as per the provisions laid down in Chapter IV D of the Income-tax Act and the said profit is not arrived by deducting the remuneration paid to the working partners. The sections in Chapter IV D explain which expenditure, deduction is eligible to be claimed as deduction and which expenditure is not admissible as deduction.
In case if you arrive the net profit after deducting remuneration to the working partners it should be added back.
If you still do not understand let me know. I will explain in detail.
Best Wishes
Sathikonda
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