Respected CCI Members,
Partnership firm which is assessed under section 44AD for AY 2019-20.After Computing 8% on Turnover, Shall i deduct Partner's salary and Interest as per section 40(b) from income computed as per above mentioned section? Can Eight Percentage on Turnover construed as before deduction of Partner's remuneration?
Kindly help me in this regard.
Yours Sincerely,
Dhebek M N
No. Parner's salary & interest cannot be deducted from presumptive income assessed u/s. 44AD.
Yes. Correct as per sec. 44AD(4) of the act.
Yes. 8 percent shall be construed as before deducting the remuneration and interest. Once 8 percent is calculated on the turnover (Sec 44AD), Section 40b provisions for deduction (Partners remuneration and Interest on Capital) can be invoked.
BHUPINDER SHAH AND COMPANY
New Delhi
CA Inter
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