Consultancy fees or remuneration

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Ritu S

Student

21 Points Posted on 08 March 2017

Hello,

There are 3 partners (doctors) in partnership firm (hospital). Each one is special in different field. They take interest, remuneration and share in profit (if any) from firm.

Now they want to take consulatncy fees for their specific services (like surgery or other cases looked specifically by specialised doctor).

Whether Consultancy Fees would be allowed or will be termed as remuneration only?
If allowed then TDS u/s 194J would be required to deduct?
Tax treament for the same in the hands of firm & partners?

Thanks

Ritu

Replies (2)

Guest

Posted on 08 March 2017

READ PATNERSHIP DEED WHAT MENTION ABOUT SALARY AND INTEREST

AND PROFESSIONAL FEES IF TAKE PROFESSIONAL FESS TDS APPLICABLE

TDS APPLICABLE ON INTEREST ON PROFESSINAL FESS

Guest

Posted on 08 March 2017

And for consultancy fees, you should keep in mind Sec. 40A(2) i.e. the fees you paid should not exceed the fair market value of the service. If it is within the limit, and even though paid to the partner, then it is allowed without any limit. That income would also be taxable under PGBP i.e. Business Income.