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Need clarification-income tax act, 1962

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Balaji

25 Points Posted on 22 July 2015

Can anyone please explain this section 10(2)?

Share income of a person being a partner of a firm (includes Limited Liability Partnerships) which is separately
assessed as such is exempt from tax. For the purposes of this clause, the share of a partner in the total income
of a firm separately assessed as such shall be an amount which bears to the total income of the firm the same
proportion as the amount of his share in the profits of the firm in accordance with the partnership deed bears to
such profits.

I can understand that partner's share in income in exempted but I can't understand the latter part of the section. Please someone explain this. Thank you..!

Replies (2)

CA Suri Kota

Assistant Manager @ EY

856 Points Posted on 22 July 2015

It just says the profits of partners should be distributed in the ratio per the partnership deed.

Thanks

Suri

goutham

Principal at candaforca

50 Points Posted on 24 July 2015

Section 10(2) means:

Any sum received by an individual as a member of a Hindu undivided family, where such sum has been paid out of the income of the family, or, in the case of any impartible estate, where such sum has been paid out of the income of the estate belonging to the family.