Remuneration paid to partners of a firm

Generally remuneration paid to partner is taxable in hands of the partner. However this remuneration paid to partner will be subject to threshhold limit as below:

Profit up to 3 lakhs : Rs.1,50,000/- or 90% of profit which ever is more

Profit more than 3 lakhs: Upto 3 lakh 90% and above 3 lakhs 60%

if the remuneration paid is more, the same will be disallowed and added back to profit of the firm.

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