Suppose if there is some person X drawing salary from his business(suppose all of this was allowed under IT Act as partner's remuneration) what will be the rate at which he has to pay tax on this salary income. Does the slab of an individual will apply?
This salary will be shown as salary or PGBP in his ITR?
Will your answer differ if this is a case of a professional?
1)At Slab Rates
2)Income from Business or Profession
3)No.
| Originally posted by :Ksh*tij Saxena | ||
| " | Suppose if there is some person X drawing salary from his business(suppose all of this was allowed under IT Act as partner's remuneration) what will be the rate at which he has to pay tax on this salary income. Does the slab of an individual will apply? This salary will be shown as salary or PGBP in his ITR? Will your answer differ if this is a case of a professional? |
" |
As far as a partner is concerned, he is assessed in his individual status apart from his Firm, so the tax rates applicable to an individual will apply to his taxable income. The salary drawn by the partner is assessed as his Business Income.
The answer won't differ in case of a professional as the relationship of employer-employee doesn't exist between the partner and firm.
as per sec 28 it is specifically provided that any remuneratuon drawn by partner from his firm will be taxable as his business income.
as regards taxability he is individual so slab rate is applicable.
no cahnge if is profeesional also
Yes all the above are right. It wiil be taxable as income from business & profession and will be taxed at the slab rates applicable to it. The rate of distribution of salary has also been increased in the budget for the current year.
Thanks everyone for your help
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