Partnership firm-- income tax / s. tax etd.,

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Rajendra prasad

Manager

26 Points Joined November 2012

Hello Sir, Would like to seek expertise advise on my Partnership firm.

We have started a partnership firm of THREE from the date of 1st July 2011, but the formal Partnership deed made on 1st Sept 2012 for a Service co.,

The parties shall have a profit & loss share / remuneration as follows, 1. 60%- Rs.25000/ P.M 2. 20%- Rs.12500/ P.M 3. 20%- Rs.12500/ P.M Though firm started in July,2011, the first business executed During DEC 2012 only.

The bills were raised for the amount of 8,45,000 (total service for the year 2012-2013) and the payment has been received from the client in the month of Feb,2013 after TDS deduction. Here our queries as follows,

1. Are the above service attract S.tax, are there any amount limitations on the turnover.

2. The expenses were incurred about 7.6 Lakhs towards third party payments a/c service performed.. therefore the total Gross Profit was Rs.80K Apprx. Are there any document evidence to be maintained for 7.6L payment?

3.Whether TDS deducted amount shall get as refund from income tax dept?

4. Looking into the remuneration and Gross profit earned , are there any income tax to be payable for the amount earned?

5. When is the due for income tax filing of Partnership?

6. What are the legal documents to be maintained for the firm. and statutory obligations to be fulfilled being Partnership firm?

7. Are the accounts to be audited by auditor? Would really appreciate any of your expertise for the response on the queries raised above. Also pl provide any other information shall be useful in fulfilling legal requirements of the firm.

Looking forward your earlier response. Thanks in Advance.

Regards Prasad

Rajendra Prasad

Replies (2)

atul kumar agarwal

advocate

23 Points Joined May 2014

Sir plz send me a format in word for partnership deed for income tax/vat purposes and also tell me its stamp cost.

Thanks

Swami Ayyappa Nuli

TAX ADVISOR & CONSULTANT AT G.S.T SUVIDH

1372 Points Joined June 2012

1)To check whether Service Tax provisions apply or not, you need to consider turnover of previous financial year. In your case turnover in F.Y 2012-13 is 8.45lakhs and previous year turnover is "NIL" therefore Service tax provisions will not apply for F.Y 2012-13(If your turnover in previous F.Y exceeds 10Lakhs then service tax provisions will apply in current F.Y from the beginning of rupee. If previous year turnover does not exceed 10lakhs then you can claim exemption of 10Lakhs and you need to collect ST after 10Lakhs turnover exceeded)

2)In your case you have Input services. You may pay bills for your Input services inclusive of service tax. If you maintain bills then you can claim service tax paid as deduction against your service tax liability. In your case as you don't have ST liability for F.Y 2012-13, no need arises for ST purpose but for IT purpose, you need to maintain books and all supporting's for all your expenses incurred.

3)If you have tax liability as per IT then TDS will be deducted while computing Income tax. If you firm don't have profits but losses then you will be refunded TDS deducted by your clients from IT department.

4)In your case, for F.Y 2012-13, maximum remuneration payable by firm to all partners shall be 1,50,000. hence to this extent of 1.5lakhs will be taxable in the hands of partners as business Income.

5)If your firm is liable to tax audit u/s.44AB then due date for Income tax filings will be 30th September otherwise 31st July. In your case for F.Y 2012-13, your firm is not liable to tax audit hence due date will be 31st July.

6) Partnership deed and if your turnover exceeds 9lakhs in any F.Y, you should get registered for S.T and Service tax registration certificate. Obligations are ST return filings and Income tax filings.

7)If turnover or Gross receipts of your firm exceed 25lakhs in a financial year then you are liable to tax audit u/s.44AB.

Above contentions are not comprehensive.