Partner's remuneration u/s 40(b) of I.T.Act

Assesse being a Parnership Firm. As per terms of Deed Partner's remuneration shall be provided as per section 40(b) of I.T.Act. Now  for the Current Year there shall be book loss before providing the same. Whether is it  mandatory to provide in books the parner's remuneration subject to maximun Rs. 1,50,000/- in case of Book loss for the year ended as on 31.03.2010.

regards.

Ca Sanjay Baheti

Replies (7)

partner's remuneration shud be accounted whether or not there is profit.

regards,

ratan

Yes, according to Section 40 (b), remuneration must be provided @ 1,50,000 or 90% whichever is higher. Hence, when there is a loss, remuneration must be provided @ 1,50,000.

what if the book profits of partnership firm is Rs.120000, hw much remuneration is to be shown, if Rs.150000 is provided ther will b a loss of Rs.30000, is it to b shown in same way or

108000 (90% of 120000) can be shown.

no..in any case it has to be higher of 150000 or 90% of book profit...so 150000 will be the remuneration to be provided......:)

FIRST OF ALL, THAT SECTION TALKS OF THE MAXIMUM ELIGIBLE AMOUNT

which can be claimed as an expenses.   So, it is not mandatory that even if there is Book Loss, Partners' remuneration should be providied.  NO.  it is a OPTION only.

the point is the firm is E L I G I B L E to that extent.  it is there option whether to provide or not.

i agree to siva siva . . 40b Talks about only the disallowance if remuneration exceeds as per the Act. . To the extent of RS.1,50,000 u can claim as expenses if u want. . if u claim ur loss vil increase so it can be carry forwarded to next 8 yrs so that it may be used to reduce the profit of future years too. .
 

yeah...i agree with u all....150000 is the maximum pernissible limit in this case fr partner's remuneration.......

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