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Expenses from Partners remuneration

Navami (16 Points)

10 May 2007

Hi,

A working partner is eligible for remuneration and the same is allowed as an expenditure for the firm to the extent provided in the Income Tax Act. The remuneration (gross) which is allowed as an expenditure is to be taxed in the hands of the partner.

The query is -

Whether the Gross remuneration is fully taxable ? or whether any of the expenditure such as travelling or telephone etc.. can be claimed from such gross remuneration ?

Thanks & Regards

Navami

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12 Replies

Manchanda Vishal (25 Points)
Replied 10 May 2007

HELLO

THE REPLY TO UR QUERY IS AS FOLLOWS:--

AS PER SEC40(b)

ANY REMUNERATION PAID TO A WORKING PARTNER .. B Y W H A T E V E R N A M E CALLED SHALL BE ALLOWED AS PER THE SLAB GIVEN, SUBJECT TO PROV OF SAME IN THE P DEED

SO WHETHER ITS SALARY PAYMENT, TELEPHONE ALLOWANCE PAYMENT, ELECTRICITY BILLS , ETC HAS TO BE ROUTED THROUGH SEC40b)

im sure that now u have got reply of ur query

vishal manchanda
ca final student
yahoo online chat id=the_only_sober_guy

Manchanda Vishal (25 Points)
Replied 10 May 2007

HELLO

GROSS REMUNERATION SHALL BE TAXABLE AS THE PGBP INCOME IN THE HANDS OF PARTNERS AND NO EXP. IN EARNING OF SUCH INCOME SUCH AS TELEPHONE ETC SHALL BE ALLOWED AS DEDUCTION IN THEIR HANDS.

VISHAL MANCHANDA

Parikshit (13 Points)
Replied 10 May 2007

The partners salary is taxable under the head PGBP in the hands of partners. in case u can prove any expenditure made to earn such salary, it shall be allowed as expenditure u/s 37(1) in the hands of partners.

Vishal Singla (16 Points)
Replied 10 May 2007

Hi
Any salary , bonus, commission, interest or any other payment (except the rent of his premises used by the firm for its business) given by the PFAF to its partners is an allowed business expense for the PFAF as per the limits provided in sec 40(b) of the Act providedly all the payments have been made as per the Partnership deed.

But all these payments are taxable for Partners individually as their Business Income u/s 28 of the Act. The amount of expense to the extent it is allowed for PFAF is taxable for the Partner. If partner incurres any expenditure personally to earn this income then he can claim deduction u/s 37. For Example: Partner took a loan from bank to make an investment in PFAF, then interest on such loan is deductible from the Business Income.

Regards
Vishal

Iyyappan (Student) (20 Points)
Replied 03 December 2008

Anybody can help me?

I want know what is the slab rate of percentage to partner remuneration allowed by income tax authority of india

Thanks and best regards

Iyyappan

Gaurav Pradhan (Article Assisstant) (32 Points)
Replied 25 August 2011

Can REMUNERATION BE GIVEN TO A HUF AS PARTNER

navaneesh (auditor) (23 Points)
Replied 16 January 2012

plese let me know the remuneration amount to working partners allowed in incometax

SUBRAMANYAM GIRISHA (PROPRIETOR) (25 Points)
Replied 29 March 2017

HELLO

REMUNERATION RECEIVED BY PARTNER FROM COMPANY. WHETHER HE CAN CLAIM ANY EXPENSE LIKE TELEPHONE BILLS. CONVEYANCE. OR RENT PAID TO HOUSE

CLARIFY THE SAME @ THE EARLIEST.

REGARDS

suresh (proprietor) (425 Points)
Replied 26 September 2017

NO. PERSONAL EXPENCES SUCH AS RENT OF RESIDENTIAL HOUSE IS NOT DEDUCTIBLE.

YOU NEED TO PROVE THE NEXUS THAT YOU HAVE INCURRED SUCH EXPENCES TO EARN THE INCOME OF REMUNERATION OR INTEREST ON CAPITAL INVESTED FROM THE PARTNERSHIP FIRM.

suresh (proprietor) (425 Points)
Replied 26 September 2017

MR. PRADHAN,

REMUNERATION GIVEN TOP THE HUF PARTNER WILL BE TAXABLE IN THE HANDS OF THE KARTA OF HUF. AS REMUNERATION IS THE INCOME RELEVATN TO THE PERSONAL ABILITIES OF THE PARTNER. AS PER PARTNERSHIP HUF IS REPRESENTED BY THE KARTA OF HUF AS A PARTNER.

Venkataramana Dhara (Proprietor) (22 Points)
Replied 06 January 2020

No ...Salary can only be given to the Karta of HUF for working which in turn will be taxable in the individual hands of the Karta...No Salary to HUF as there is no physical status