Can an individual claim expenses out of partner salary received from firm

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Financial advisor
589 Points Joined December 2014

Dear Experts,

Can an individual claim salary paid to staff for assisting in earning remuneration from partnership  in preparing income tax return? Is it allowable expenditure? Kindly help.

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On 08 November 2024 at 13:32 Report
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Master in Accounts & high court Advocate
9000 Points Joined December 2011

Yes, an individual can claim salary paid to staff for assisting in earning remuneration from a partnership in preparing an income tax return as an allowable expenditure.

 According to the Income Tax Act, any expenditure incurred solely for the purpose of earning income from a business or profession is allowable as a deduction.

This includes salaries paid to employees who are involved in the preparation of income tax returns, as long as the expenditure is reasonable and properly documented.

 However, it's important to note that the salary paid to staff must be reasonable and proportionate to the work performed.

 Additionally, the staff member's role and responsibilities should be clearly defined, and their salary should be properly documented through payslips, contracts, or other relevant records.

To claim this expenditure, the individual should maintain proper records, including: - Payslips and salary records - Employment contracts or agreements - Records of work performed by the staff member - 

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On 08 November 2024 at 13:49
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Master in Accounts & high court Advocate
9000 Points Joined December 2011

Yes, an individual can claim salary paid to staff for assisting in earning remuneration from a partnership in preparing an income tax return as an allowable expenditure.

 According to the Income Tax Act, any expenditure incurred solely for the purpose of earning income from a business or profession is allowable as a deduction.

This includes salaries paid to employees who are involved in the preparation of income tax returns, as long as the expenditure is reasonable and properly documented.

 However, it's important to note that the salary paid to staff must be reasonable and proportionate to the work performed.

 Additionally, the staff member's role and responsibilities should be clearly defined, and their salary should be properly documented through payslips, contracts, or other relevant records.

To claim this expenditure, the individual should maintain proper records, including: - Payslips and salary records - Employment contracts or agreements - Records of work performed by the staff member - 

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On 08 November 2024 at 13:54
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Financial advisor
589 Points Joined December 2014

Sir,

Is there any case law ? If yes please share.

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On 08 November 2024 at 15:02
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Fellow CA
86871 Points Joined June 2009

I am not sure if you can see my previous response. Please check Supreme Court judgment in the case of Ramlik Kothari and ITAT judgment in Aman Tandon vs ACIT.

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On 12 November 2024 at 08:35


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