IF PARTNERSHIP FIRM PROFIT IS 220000/- THEN HOW MUCH SALARY WE CAN GIVE TO THE PARTNER AS PER RULE IF PARTNER PROFIT SHARING IS 50:50
12 Replies
kanagaraj
(CHARTERED ACCOUNTANT)
(793 Points)
Replied 15 October 2010
Dear Amar,
It is 1,50,000/- or 90% of the book profit whichever is more.The Sharing ratio is not played any role for remuneration. Only the Working partners are eleigible for remuneration.
with regards
CA Himanshu Bansal
(Risk Manager)
(2345 Points)
Replied 15 October 2010
Agreed with Kanagaraj Ji..
In this case, It will be --
Lower of the two -
1.Sum Actually paid as salary.
2. Higher of the two -
(i) 150,000
(ii) If profits are upto 300,000 then 90 % of profits.
In simple words,we can conclude that maximum salary that can be paid to any working partner(s) in this case is 198,000.
CA. Abhishek K. Pandey
(Manager (Advance))
(901 Points)
Replied 15 October 2010
Simple rule as per Sec. 43(b)
(1) Upto 3,00,000.00
150,000 or 90% whichever is more.
(2) Above 300,000.00
60% of profits.
So, in your case,
maximum profit distibutable is 198,000.00
Would be shared 99,000.00 each.
Abhishek K. Pandey
XYZ.....
(-)
(516 Points)
Replied 16 October 2010
MAXIMUM SALARY WILL BE RS.198OOO AS CALCULATED ABOVE...................BUT IS THERE MINIMUM SALARY. FOR EXAMPLE WHAT IF MAX. SALARY CALCULATED IS RS.198000 BUT FIRM IS PAYING NO SALARY OR ANY AMOUNT LIKE RS. 50000.IS THIS PERMISSIBLE............................
CA Himanshu Bansal
(Risk Manager)
(2345 Points)
Replied 16 October 2010
| Originally posted by : upjeet s. bhatia CA FINAL ST. | ||
 |
MAXIMUM SALARY WILL BE RS.198OOO AS CALCULATED ABOVE...................BUT IS THERE MINIMUM SALARY. FOR EXAMPLE WHAT IF MAX. SALARY CALCULATED IS RS.198000 BUT FIRM IS PAYING NO SALARY OR ANY AMOUNT LIKE RS. 50000.IS THIS PERMISSIBLE............................ |
 |
Pls Read the Method :
Lower of the two -
(1.)Sum Actually paid as salary.
(2.) Higher of the two -
(i) 150,000
(ii) If profits are upto 300,000 then 90 % of profits
If no amount or 50,000 is paid, it falls in (1.) above.So no deduction or 50,000.
I hope it clarifies.
kanagaraj
(CHARTERED ACCOUNTANT)
(793 Points)
Replied 16 October 2010
The maximum salary is prescribed under the Act. You may pay the salary or not it is your choice only.
with regards
Rajesh Prajapati
(Accountant)
(21 Points)
Replied 27 November 2010
If firm has earn profit during the fiancial year 2010-11 Rs. 4000000/- what is the partners maximum remunerarion if firm has three partner having ratio of profit equal?
Devendra
(Chartered Accountant)
(4780 Points)
Replied 10 July 2011
On first300000,150000 or 90% of300000 whichever is higher (ie.270000)
On balance(Rs. 4000000 -300000) =3700000 x 60% =2222000.
Therefore, maximum Salary payable is (Rs. 2222000 +2700000) =2490000
The maximum remuneration paid to each partner is830000.
Regards,
Devendra
@*CS Siddharth Bumb. *
(B.Com, CA Final, CS )
(5270 Points)
Replied 10 July 2011
| Originally posted by : kanagaraj | ||
|
|
Dear Amar, It is 1,50,000/- or 90% of the book profit whichever is more.The Sharing ratio is not played any role for remuneration. Only the Working partners are eleigible for remuneration. with regards |
|
ASHFAQUE A. SHAIKH
(A/C MANAGER)
(27 Points)
Replied 07 September 2012
If Profit of a firm = 62000/- SO how what will be the minimum Salary
1) Rs. 150000/- or
2) Rs.62000/- Or
3) Nil
if Rs. 62000/- is distrbute is it allowed as per I.Tax Act.
Niyam
(Articleship)
(33 Points)
Replied 30 November 2012
30/11/2012
Hey in form 23AC Gross transaction amount as per AS-18
which amount is to be written over here the total of transaction with related party or the aggregate balance in their account
Reply fast
CA. Abhishek K. Pandey
(Manager (Advance))
(901 Points)
Replied 30 November 2012
| Originally posted by : Niyam | ||
 |
30/11/2012 Hey in form 23AC Gross transaction amount as per AS-18 which amount is to be written over here the total of transaction with related party or the aggregate balance in their account Reply fast |
 |
Transaction Value
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