SONDIP DUTTA PURKAYASTHA (Proprietor) (38 Points)
25 March 2018Hi, experts kindly provide me the solution for filling of ITR 5 for partnership firm Under section 44AD. is it possible to take deduction of partners capital interest and remuneration
RAJA P M
("Do the Right Thing...!!!")
(127387 Points)
Replied 25 March 2018
SONDIP DUTTA PURKAYASTHA
(Proprietor)
(38 Points)
Replied 25 March 2018
Then how to get deduction for partners capital interest and remuneration ,,, kindly provide me the sample format to calculate taxable income of partnership firm under section 44AD
SONDIP DUTTA PURKAYASTHA
(Proprietor)
(38 Points)
Replied 25 March 2018
can anyone provide me how to calculate partners capital interest and remuneration under presumptive basis sec 44AD.. do i need to take the deduction of interest and remuneration on book profit ????
RAJA P M
("Do the Right Thing...!!!")
(127387 Points)
Replied 25 March 2018
2. Partner’s salary deductibility –Pre and Post Finance Act 2016
It is to be noted here that Section 44AD of the Act begins with a non-obstante clause “(1) Notwithstanding anything to the contrary contained in sections 28 to 43C”… Therefore by virtue of the non-obstante clause, Section 44AD of the Act has a superior position vis-� -vis the other provisions of the Income Tax Act. Nevertheless, Section 44AD(2) of the Act also specifically mentions that any deductions allowable under Section 30 to 38 shall be deemed to have been given full effect. Therefore there are no specific deductions available for the assessee opting for presumptive taxation under Section 44AD of the Act. However there exists an exception by virtue of a proviso to Section 44AD(2), wherein, partner’s salary and interest, subject to the threshold limits specified under Section 40(b) can be deducted from the amount of eligible income of the assessee which is 8% of the gross turnover of the business of the assessee. Hence in a nutshell, a partnership firm opting for presumptive taxation scheme under Section 44AD of the Act can deduct the partner’s salary subject to the threshold limits specified under Section 40(b).
However, Finance Act 2016 has deleted the proviso appearing in Section 44AD (2), consequent to which, deduction of the partner’s interest and salary is not further allowed for a partnership firm opting for presumptive scheme under Section 44AD of the Finance Act 2016 In this context, we would, in this article specifically, dwell upon the taxability of the Partner’s salary in the Partner’s hand when the Partnership firm is taxed under Section 44AD on presumptive basis, especially in light of the amendment made under the Finance Act 2016.
RAJA P M
("Do the Right Thing...!!!")
(127387 Points)
Replied 25 March 2018
Except Tax Audit the Firm will be pay Tax on 8% of the T/O.
For Example (AY 2017-18) if T/O Rs. 50 Lakhs then You will be calculate 8% of the Income Rs. 400000.
Payable Tax @ 30% + 3% Cess = 123600. After assesment / Filed The Partners withdraw the share without Tax...
In case You will opt Normal Provisions then You can avail the benifits of Remuneration, Interest and Also Depreciation on Assets. But, Tax will be payable as per above Calculations. No way for less Tax except Tax Audit...
SONDIP DUTTA PURKAYASTHA
(Proprietor)
(38 Points)
Replied 25 March 2018
how to calculate partners individual tax if i do not take the benefit of partners remuneration and interest on capital in partnership firm on which tax was calculated u/s 44AD @ 8% on total turnover
RAJA P M
("Do the Right Thing...!!!")
(127387 Points)
Replied 25 March 2018
If you are ask about the Partnership Firm...?
After pay the tax as Per sec 44AD the Profit amount to transfer Partners capital account. Also it's fully exempted in Hands of Partners.
SONDIP DUTTA PURKAYASTHA
(Proprietor)
(38 Points)
Replied 26 March 2018
WHAT are the criteria avaible for Partnership firm opting for 44ADA calculation... is it possible to deduct Capital interest & remuneration from Gross Receipt and the find out 50% of Income
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