Partners remuneration in income tax

This discussion clarifies whether partner salaries paid in cash are allowable as expenses for income tax purposes. According to Section 40(b) of the Income Tax Act 1961, such payments are deductible only if specific conditions are met. To ensure compliance and avoid issues, it's advised to adhere to both Section 40(b) and Section 40A(3), which limits cash payments to £10,000 per partner per day. Therefore, payments should ideally be made via cheque or electronic methods like NEFT, RTGS, IMPS, or UPI.