Dear All
Assessee is a partner and getting monthly fixed salary of Rs.50,000 from ABC & Co.
Can we bifurcate the fixed salary into Basic, HRA, Conveyance, LTA and Special allowance?. If bifurcated to various components as said, is it permissible to do so.
Please any one give reply as soon as possible
For salary, the only thing is the partnership deed should have the clause. But as per Income Tax Act, when there is Employer- Employee relationship, the remuneration paid to employee will be called as salary. But in Partnership, there will exist Prinicipal- Agent relationship where Firm is Principal and Partner is agent. So, any amount getting from firm in status of Partner will be treated as income from Partnership firm and thereby income from business for each such partner. Hope the clarity u wanted has been given. Thanq
Firstly, there is no Employer-Employee relationship. The Assessee being a Partner is receiving Salary from the Partnership Firm, accordingly, Salary received by the Partner is taxable under the Head Income from Business. Hence the salary cannot bifurcated into various Allowances.
Regards,
Devendra Kulkarni
| Originally posted by : CA DIGANT CHADHA | ||
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SALARY TO A PARTNER IS CHARGED UNDER HEAD INCOME AND GAIN FROM BUSINESS AND PROFESSION, SO THERE IS NO POINT OF EXEMPTIONS UNDER THE HEAD SALARY. |
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agree with this comment
Agree with Devendra
First Of all , salary income from A partnership firm is taxable in the hand of the partner under the head PGBP and the same is allowed to the firm, hence the bifurcation can be done from the firms Side.
Fully agree with above comments........
CAclubindia
