I am a partner of a firm which filed ITR 4 (44AD-presumptive income) return for AY1819 . My question is
1. Since the income tax is calculated as 6% or 8% of turnover, why should we pay interest on capital or salary to partner which is not deductible as an expense of the firm and becomes taxable in the hands of the partner. We can instead pay the whole thing to partners as exempt income u/s 10(2A). Is it leagally ok?
2. If you have to, where do we show salary to partner, interest on capital and Exempt income u/s 10(2A) in ITR 3.
3. Is it OK if your actual profit turns out to be more that calculated by 6%+8% formula and gets added to capital of the partners at the end of the year.
Will be thankful if some expert replies.
CAclubindia
