Partners salary

WHAT S THE SLAB OF SALARY TO PARTNERS IN INCOME TAX ACT?

Replies (3)

AS PER SEC40(b) OF THE ITA REMUNERATION  TO PARTNERS ARE

BOOK PROFIT  UPTO 300,000 -90% OR Rs.150,000 which ever is more 

and on restAs Per the Modified Provisions No need to Categorise the Firm as "Professional" or "Others", irrespective of the Nature of business they carryout the Remuneration will be Aggregate of Following

a) Rs.150000 or 90% of Profit On First Rs.3 Lacs or Loss and

b) 60% of Balance Book Profit over and above Rs.3Lacs

 

The Full Provision is given below

As Per 40(b)(v) "any payment of remuneration to any partner who is a working partner, which is authorised by, and is in accordance with, the terms of the partnership deed and relates to any period falling after the date of such partnership deed in so far as the amount of such payment to all the partners during the previous year exceeds the aggregate amount computed as hereunder :

(1) in case of a firm carrying on a profession referred to in section 44AA or which is notified for the purpose of that section

(a) on the first Rs. 1,00,000 of Rs. 50,000 or at the rate of the book-profit or in case 90 per cent of the book- of a loss profit, whichever is more;

(b) on the next Rs. 1,00,000 of at the rate of 60 per cent; the book-profit

(c) on the balance of the at the rate of 40 per cent; book-profit

(2) in the case of any other firm

(a) on the first Rs. 75,000 of Rs. 50,000 or at the rate of the book-profit, or in case 90 per cent of the book- of a loss profit, whichever is more;

(b) on the next Rs. 75,000 of at the rate of 60 per cent; the book-profit

(c) on the balance of the at the rate of 40 per cent: book-profit

The following items shall be substituted for the existing items (1) and (2) of sub-clause (v) of clause (b) of section 40 by the Finance (No. 2) Act, 2009, w.e.f. 1-4-2010 :

(a) on the first Rs. 3,00,000 of the book-profit or in case of a loss

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

(b) on the balance of the book-profit

at the rate of 60 per cent"

As Per the Modified Provisions No need to Categorise the Firm as "Professional" or "Others", irrespective of the Nature of business they carryout the Remuneration will be Aggregate of Following

 

thnkssssss kriti for giving such details
Originally posted by : KIRTI SINGH

AS PER SEC40(b) OF THE ITA REMUNERATION  TO PARTNERS ARE

BOOK PROFIT  UPTO 300,000 -90% OR 150,000 which ever is more 

and on restAs Per the Modified Provisions No need to Categorise the Firm as "Professional" or "Others", irrespective of the Nature of business they carryout the Remuneration will be Aggregate of Following

a) 150000 or 90% of Profit On First 3 Lacs or Loss and

b) 60% of Balance Book Profit over and above Rs.3Lacs

 

The Full Provision is given below

As Per 40(b)(v) "any payment of remuneration to any partner who is a working partner, which is authorised by, and is in accordance with, the terms of the partnership deed and relates to any period falling after the date of such partnership deed in so far as the amount of such payment to all the partners during the previous year exceeds the aggregate amount computed as hereunder :

(1) in case of a firm carrying on a profession referred to in section 44AA or which is notified for the purpose of that section

(a) on the first1,00,000 of50,000 or at the rate of the book-profit or in case 90 per cent of the book- of a loss profit, whichever is more;

(b) on the next1,00,000 of at the rate of 60 per cent; the book-profit

(c) on the balance of the at the rate of 40 per cent; book-profit

(2) in the case of any other firm

(a) on the first75,000 of50,000 or at the rate of the book-profit, or in case 90 per cent of the book- of a loss profit, whichever is more;

(b) on the next75,000 of at the rate of 60 per cent; the book-profit

(c) on the balance of the at the rate of 40 per cent: book-profit

The following items shall be substituted for the existing items (1) and (2) of sub-clause (v) of clause (b) of section 40 by the Finance (No. 2) Act, 2009, w.e.f. 1-4-2010 :





(a) on the first3,00,000 of the book-profit or in case of a loss



1,50,000 or at the rate of 90 per cent of the book-profit, whichever is more;





(b) on the balance of the book-profit



at the rate of 60 per cent"






As Per the Modified Provisions No need to Categorise the Firm as "Professional" or "Others", irrespective of the Nature of business they carryout the Remuneration will be Aggregate of Following

 
 

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