Dera friends,
ours is a partnership firm. from this month we are going to pay remuneration to managing partner.
Genarally different types of allpwances & perquisites are parts of salary. so my doubt is shall we make all those allowances as part of remunaration to a partner. wnd do we need to deduct tds on remunaration,
please answere me friends, thans in advance.;
Remuneration to a partner whihc is also termed as salary paid to partner & salary paid to employee are two different terms.
Remunertaion or salry paid to partner by a partnership firm is taxable under the head business wehreas salary paid to employee is taxable under the head Salary. Currently tehre is no provision for deducting tax at source for remuneration paid to partners whihc is applicable in case of remuneration paid to the Director of a company.
the remuneration paid to teh active partners is deductibel while calculating the taxable income of the firm to the extent specified in section 40(b) of the I-T Act.
I completely agree with Mr. Karandikar.
All allowances paid to partner will be considered as forming part of remuneration to partner & its allowability will be determined on basis of sec. 40(b) of the Act.
No amount of TDS will be required to be deducted on any amount of Remuneration / Interest on Capital paid to partners.
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