Does in partnership firm calculation of remuneration ???

Book Profit means Net Profit as per P/L Account + Remuneration to Partners. 

For eg - if Net profit after all expenses is Rs.400,000 and salary to PARTNERS is Rs.800,000, Book profit is Rs. 12,00,000.

Allowable remuneration to partners : on first 3Lacs of Book profit 90% ie Rs.270,000 and on the rest 60% ie Rs. 540,000. Total Rs. 810,000.

Since allowable remuneration u/s40b is higher than the actual rem. to partners, the entire amount shall be allowed.

If, the allowable rem comes to rs.7 lacs only, the excess salary paid to partners to the extent of Rs.1 lac shall be disallowed.

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