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Partner salary

Suraj (Student) (85 Points)

06 January 2019

Partnership firm paying salary to its working partner whereas in partnership deed salary for partner is not mentioned but resolution was passed for paying salary to partner, will it be allowed while computing income tax or same will be disallowed...please advice.

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4 Replies

Mohan Panwar (52 Points)
Replied 06 January 2019

Remuneration paid to partner is allowed subject to secrion 40(b)
40(b) specifiaclly says any remuneration ia not authorised or not in accordance with partnership deed will be disallowed

so in aforesaid case it will be disallowed

VIVEK PATEL (16 Points)
Replied 06 January 2019

remuneration to partner should be authorised by partnership deed. hence resolution won't work. u need to mentioned about remuneration in partnership deed

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Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 06 January 2019

get a corrected p'ship incorporating the remuneration clause in it and get it registered with the ROF. After that you will be able to claim the deduction for partner's salaru