Client has LLP - Business is real estate - Work in progress is 30 Lac .
Company is showing current loss as 30 lac .
What would be partner renumeration allowable .
Partner remuneration
Replies (5)
DUE TO INADEQUATE PROFIT NO REMUNERATION SHALL BE GIVEN FROM PROFITS !!!
As per sec.40(b), Up to 3Lakhs: 1,50,000 or 90% of book profits which ever is higher and above 3Lakhs 60% of Book profits. Hence if firm has loss, 90% of Book profits is Negative so obviously 1,50,000 will be higher figure. Therfore you can pay remuneration upto 1,50,000 in the absence of inadequate profits or loss to partners which will be allowable u/s.40(b)
This 30 lac is work in progress. Sales r not yet booked . Then what would be effect.
Right said by mr suli
You can pay salary up to rs 150000 and this will increse your loss.
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