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.
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.
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.
CAclubindia
