Income tax return for partnership firm

1. If income from business or profession  exceed Rs. 120,000 or total sales or gross receipts are in excees of Rs. 10,00,000 in all the three year immediately preceding the previous year  or if the business or profession  is newly setup , gross receipt is  likely to exceed the said amount.

    you are required to maintained such books of account and other documents which may enable to compute taxable/total income.

2. if firm claims that profit and gain from the business is lower than 8% of gross turnover (irrespective turnover) then you have to go for tax audit.

3. your should maintain such books of account and other documents which may enable to compute taxable/total income.

4. firm can get TDS as refund, if firm's total tds is deducted  more than total tax payable on total income, by filing income tax return ; ITR- 5 is notified for Partnership Firm.

5. for tax benefit, you have to ensure that remuneration and interest has been considered as per partnership deed

Friends My Income and Expenditure will be as follows

Friend now advice about  taxability  of the partnership firm. Here I wish to inform that partners have their independent business and from their they are earning more than 2.50 lacs annualy and they fill IT return for their income independently. 

I have one more doubt that can I  become partner of more than one firm. Is it allowed by Income tax Act. kindly  advice

if partners are engaged in different business ....no problem
they will consider all earning form firm such as remuneration, interest , commission, bonus etc in their individual return

taxability of Firm
as discussed in point 2...

Net profit of Firm is less than 8% of gross receipt (assumed all expenditure has been debited)

Two options are available

1.  declare income 8% of gross receipt under sec 44AD and pay tax there on

2. Tax Audit

It means Income tax payable for a FY for receipt of Rs. 100000 will be as follow :

Total Receipt       100000

Income                   8000    (8% of total receipt) 

Tax payable          2700   Approx  (30% of income plus cess )

Here Net receipt is Rs. 90000 after deduction of TDS @ 10%.  Income tax refund will be (10000-2700). Rs. 6300 can be claimed from Income tax department.

With above example I am expressing my understanding. kindly confirm whether I am correct.

Secondly if I go for this option. It mean we donot have to maintain books of account. just paying tax on @ 33% on 8% of total receipt is sufficent. 

I think both cases are similar and ok

you can declare income 8% of gross receipt, in case of your book profit is less than 8% of gross receipt  (on Rs. 1,00,000 not on Rs. 90,000 net )

and pay tax 30.90%  and excess amount paid can be claimed as refund.

if books of accounts is not maintained then how you can determine the profit earned, is less than 8% or more
 

Have you debited partner's remuneration and interest to partner in profit and loss account ?

after estimating income under sec 44AD .i.e 8% of gross turnover

in case of partnership firm, deduction under sec 40(b)  shall be allowed.

Friend,

   Charging Remuneration and interest are use less as if it deducted from firm income they will be added in the Individual Income. For avoiding  books of accounts I just wants to  pay tax on 8% of tatal receipt irrespective of Income higher or lower than 8%. is is possible.

DEAR SIR

OUR FIRM TURNOVE 517440/-

PARTNERS REMUNERATION   100000/-

WHAT THE TAX LIABILITY