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Remuneration in partnership

28 October 2021

remuneration clause mein partnership deed ke ander kitne amount ka each partner remuneration dikha sakte hain. deed mein 2 partners hain. one Parner NRI hai. 2 partners ke liye kitne rupees tak remuneration dikha sakte hain. please guide me. please guide me

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5 Replies

Janak Shah (ca) (603 Points)
Replied 28 October 2021

There is no limit on remuneration. If there is a NRI partner it is always better to check DTAA otherwise TDS applicability will be involved.
Fix the remuneration based on expected profit and individual taxable income of partners.

CA Raj Doshi (Practising CA) (8733 Points)
Replied 29 October 2021

Remuneration shall be provided as per the agreed clause as per the partnership Deed. However maximum allowable remuneration for tax purposes shall be subject to limits u/s 40(b). Any amount paid or credited to a non resident partner shall be subject to the TDS provisions. Also, DTAA shall be referred subject to fulfillment of conditions, documentation and beneficial tax rate.

CA Aakarsh Jain (CA) (10216 Points)
Replied 31 October 2021

Agree with the above comment

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 01 November 2021

Agree with raj ji

gautam kathiriya (student) (39 Points)
Replied 05 February 2022

Respected All,

I have doubt about remuneration paid to partners.

Firm earned net profit in FY 2020-21 of rs.520000 after interst but before remuneration payable and in previous year i.e.2019-20 firm had unabsorbed depreciation of rs.250000.
So now what is my book profit u/s 40b on which firm can give remuneration.

thanks