ICICI

Payment to relative


Ankit Agarwal (student)     19 November 2019

Ankit Agarwal
student 
 3 likes  51 points

| My Other Post

Salary paid to one of the partners wife brother (partner sala) is allowed as exp to the firm and whether its have to be reported in 3cd?

1 Like

Manish Dugar   21 November 2019

Manish Dugar

 1 likes  9 points

View Profile | My Other Post

Partners brother in law is considered as relative u/s 40A(2)(b). As per the said section, if any payment is made to a relative and the said payment is unreasonable or excessive in nature considering the fair market value of goods or services performed, the A.O. can disallow the expenditure to the extent he considers excessive or unreasonable.

Considering the above, Salary paid to partners wife brother i.e. sala of partner (brother-in-law) is allowed as expenditure to the firm if the expenditure is reasonable in nature.

Further, the same has to be disclosed in Form 3CD as payment made to persons specified u/s 40A(2)(b).

1 Like
avater

official kamalpreetsingh   21 November 2019

official kamalpreetsingh

 2 likes  32 points

View Profile | My Other Post

This section is not application in some cases. There is being some exceptions also.

1 Like
avater

Ankit Agarwal (student)     21 November 2019

Ankit Agarwal
student 
 3 likes  51 points

View Profile | My Other Post

@ kamal ji what exception?

avater

RAJA P M ("Do the Right Thing...!!!")     21 November 2019

RAJA P M
"Do the Right Thing...!!!" 
 7600 likes  103233 points

View Profile | My Other Post

The said salary is not acceptable if partner's salary to any other if he is not a partner or employee..

Better to consider the relative a employee in the firm and deal the same employee salary.

avater

Ankit Agarwal (student)     21 November 2019

Ankit Agarwal
student 
 3 likes  51 points

View Profile | My Other Post

Here relative is treated as an employee only
But wife brother is considered as relative?

avater

RAJA P M ("Do the Right Thing...!!!")     21 November 2019

RAJA P M
"Do the Right Thing...!!!" 
 7600 likes  103233 points

View Profile | My Other Post

Originally posted by : Ankit Agarwal
Here relative is treated as an employee onlyBut wife brother is considered as relative?

Salary paid to one of the partners wife brother (partner sala) is allowed as exp to the firm and whether its have to be reported in 3cd?

Read more at: https://www.caclubindia.com/forum/details.asp?quote=2106836&mod_id=535491#reply

 

What is Your exact query Dear...?

As per Your query You can't a partner's salary to any other person... Right...??? It's not allowed. In case the person is employee then You just keep the person as employee and show the expenses as per normal salary...

 

But wife brother is considered as relative? 

Are asking about relative definition then Dont be confuse with salary... If You treated as Salary then no need query about relative definition...

 

FYR ->

 

As per the Income Tax Act: Section 2(41), “relative”, in relation to an individual, means the husband, wife, brother or sister or any lineal ascendant or descendant of that individual.

As per Gift tax:

Any ‘Relative’ means as per Section 56(2),

1. Spouse, 2. Brother or sister of individual or of spouse, 3. Brother or sister of either parents, 4. Lineal ascendant/descendant of individual or of spouse, 5. Spouse of relatives mentioned in 2. to 4.

avater

Ankit Agarwal (student)     21 November 2019

Ankit Agarwal
student 
 3 likes  51 points

View Profile | My Other Post

Raja ji

My query is salary payment to wife brother who is treated as employee in a partnership firm.

Does its reporting have to be given in 3cd related party?

avater

RAJA P M ("Do the Right Thing...!!!")     21 November 2019

RAJA P M
"Do the Right Thing...!!!" 
 7600 likes  103233 points

View Profile | My Other Post

Originally posted by : Ankit Agarwal
Raja jiMy query is salary payment to wife brother who is treated as employee in a partnership firm.Does its reporting have to be given in 3cd related party?

no... treat as just salary.

avater

Ankit Agarwal (student)     21 November 2019

Ankit Agarwal
student 
 3 likes  51 points

View Profile | My Other Post

Raja ji

I am asking about its reporting in 3cd i.e payment made to related party

Whether I have to show in that?


Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register  




Popular Discussion


view more »