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Partnership return u/s 44AD
can partners remuneration and interest be deducted from declared 8% profit u/s 44ad.
Replies (4)
No 8% profit includes only business profit and losses. Partners remuneration and interest are part of profit and loss appropriation a/c.
Ms. Shruti is correct in a way. But as per your deed if you need to distribute the profit, you can deduct salaries first and then shares in the profit. The total amount will be tax free in the hands of Partners.
8% Profit is after deducting remuneration and interest
Audit u/s 44AB is applicable if he is declaring income lower than thereafter specified u/s 44AD. But, section 44AD is not applicable to Agency, Commission and Brokerage. Hence, he can declare income less than 8%.
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