Partner remuneration

can any one plsese give me an example on remuneration to partners. if firm inccurs loss still have to give remuneration .if the book profit is less than 3lac then how will be the calculation .please can any one explain 

Replies (13)

on the first Rs. 3,00,000 of the book-profit : Rs. 1,50,000 or at the rate of 90 per cent of the book-profit, whichever is more;

on the balance of the book-profit : at the rate of 60 per cent 

Salary in case of loss will not be given

as per section 40(b)

1. In case of loss remuneration will be Rs 150,000/-

2. if book profit is less than Rs 300,000/- then 90% of Profit or Rs. 150,000/- whichever is higher

Note : if you declare profit less than 8% or 6% then need to get accounts audited 

i think its only when we file pur return on presumptive baisis ..

No, its compulsory for all partnership firms

If you file return on profit calculated on presumptive basis, then remuneration is not allowable.

supose a firm has inccured loss then remunertaion payable to both the partners will be 75k each which together will amount to 150k and no need of audit . is this is right . 

Originally posted by : pavel
supose a firm has inccured loss then remunertaion payable to both the partners will be 75k each which together will amount to 150k and no need of audit . is this is right . 

yes

Originally posted by : pavel
supose a firm has inccured loss then remunertaion payable to both the partners will be 75k each which together will amount to 150k and no need of audit . is this is right . 

yes

I think you need to get your BOA audited as per section 44AB if u do not suffice (8/6)% criteria even though u pay remuneration to partners.

It has happened to many partnership firms during ITR season that is why they are in the slab of Tax Audit.

(Correct me if i am wrong).

Thanks

here the grooss reciept is only 80k and after all the expenses net profit is only 4k . this means its books are required to be get audited .

If it comes under Professional Services then 44ADA will be applied(as u talk about Gross Receipts). 

&

Normally, 44AD can be considered and BOA needs to be audited.

yes it proivdes services and its gross reciept is 80thousand and net profit is 4-5thousand ..so its reqired to be audited am i right ...

Yes , as per my erlier reply you need to get accounts audited if profit decleared is less than 8% or 6%

Payment of remuneration or not in another part 

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