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New Remuneration Clause Applicable from which Assessment Year 2025-26 OR 2026-27 ?

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K P BHANUSHALI

PROPRIETOR

564 Points Posted on 22 January 2025

Attn Friends/Seniors,

As per Topic Title, Under Indian Income Tax Act, previously therewas clause that Upto First 3 Lakh, 90% of the book profits were to be distributed between/amongst partners.

From this year, this clause has been changed to Upto First 6 Lakh, 90% of the book profits were to be distributed between/amongst partners.

My query is shall I prepare New Deed during the current year or next year ?

Thanks in advance.

Replies (3)

Quick Summary

This discussion clarifies the applicability of a new remuneration clause under the Indian Income Tax Act. Previously, 90% of book profits up to £3 lakh were distributed among partners. This threshold has now increased to £6 lakh. The key question is whether this change necessitates updating the partnership deed in the current financial year or the next, with the consensus being that it applies from the date of the deed change, even for the current financial year.