income of partner

What is Allowed in 40(b) for the Firm is only taxed in the hands of Partners.

"whereas partner's remuneration is is an allowable expenditure U/s 40b(ii), what should be the income of the partner when filing his individual return - is it the remuneration actually received by him,  or the proportion of remuneration allowed U/s 40b(ii) ?"

Income will be the remuneration actually received from the firm, after providing for the deduction u/s 10 which will be to the tune of income taxed in the hands of the firm.

While filing the return of the partner in his individual capacity, the remuneration actually allowed by the income tax act should be taken into consideration because the same is allowed as appropriation of profits for the firm and the firm does not pay tax on it.

If the remuneration allowed by the income tax act is less than the actual remuneration rcvd by the partners then the remuneration as allowed by the income tax act should be distributed among the partners in the ratio of remuneration rcvd for the purpose of filing returns.

the remuneration actually allowed

Thanx a lot  to all of you guys...  :)

The Proportion that is allowable to the partner under Sec.40(b) that proportion is taxable to the partner in his/her individual return

it will be taxable as income from business or proffession.......................

Remuneration received to the partners to be caliculated as per the section 40(b)(ii).in the firms income tax computation and Allowed portion  as an  expenditure in the firms, shall be considerred as the Income in the hands of the partner. Simple reason is to that extent is not taxed in the firm.

remuneration to partners is taxable in the hand of the partner under the head of income from profit and gains from business to the extent such remuneration is allowed to partnership firm