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Income of Partner-Computation

Purohitha (accounts officer) (88 Points)

26 May 2009

Please educate me on the procedure of computing income of partner in a partnership firm and how to file returns and what to be considered in the return?

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3 Replies

santhosh (Student) (1174 Points)
Replied 26 May 2009

It will come under the head profits and gains from business and profession.. The major incomes are 1)Income from salary computed as per section 40 b (2), 2)interest on capital, 3)Share of profits from firm(Which is exempted U/S 10), You have to file return in the ITR 3 for patner of a partnership firm....

CA.Tarun Maheshwari (CA, DISA) (7150 Points)
Replied 26 May 2009

1. Remuneration recieved by the partner from the partnership firm.

2. Interest on Partners capital recived from the partnership firm.

3. Share of profit from the partnership firm.

The above three are the main incomes that a partner gets from the partnership firm. The first two are taxable under the head 'Profits and Gains from Business and Profession.' The third one, although disclosed in the same head but it is exempt under section 10.

ITR-3 is the prescribed form for filing the ITR of a person who is a partner in any partnership firm.