REQUIRED FORMAT FOR AMENDMENT TO PARTNERSHIP DEED FOR REMUNERATION

Here's a sample format for amending a Partnership Deed to include remuneration: Amendment to Partnership Deed Regarding Remuneration This Amendment to Partnership Deed ("Amendment") is made and entered into on [Date of Amendment] ("Effective Date") by and among [Partnership Firm Name] ("Partnership Firm") and its partners ("Partners"). Recitals WHEREAS, the Partners have agreed to amend the Partnership Deed dated [Original Partnership Deed Date] ("Original Deed") to provide for remuneration to be paid to the Partners; and WHEREAS, the Partners have agreed upon the terms and conditions of such remuneration. Amendment The Partnership Deed is hereby amended by adding the following clause: *Remuneration* 1. The Partnership Firm shall pay remuneration to each Partner in consideration of their services to the Partnership Firm. 2. The remuneration payable to each Partner shall be [ specify amount or percentage of profits ] per annum, payable [ specify frequency, e.g., monthly, quarterly ]. 3. The remuneration shall be paid out of the profits of the Partnership Firm. Other Terms Except as amended hereby, the Original Deed shall remain in full force and effect. Governing Law This Amendment shall be governed by and construed in accordance with the laws of [State/Country]. Execution This Amendment has been executed by the Partners as of the date first above written. --- Signature of Partner 1: ________________________ Signature of Partner 2: ________________________ Signature of Partner 3: ________________________ Date: ________________________ Please note that this is a sample format and should be reviewed and customized according to your specific needs and circumstances. It's also recommended to consult with a lawyer or legal professional to ensure the amendment is legally binding and enforceable.

Draft Format: Amendment to Partnership Deed for Remuneration

AMENDMENT TO PARTNERSHIP DEED

This Amendment to the Partnership Deed (hereinafter referred to as the "Amendment") is made and entered into on this [Date] day of [Month], [Year] (the "Effective Date") by and among the Partners of [Name of Partnership Firm] (the "Partnership Firm"):

1. [Name of Partner 1], residing at [Address]

2. [Name of Partner 2], residing at [Address] (Add more partners as applicable)

RECITALS:

• WHEREAS the parties hereto are carrying on the business of partnership under the name and style of [Partnership Firm Name] pursuant to a Partnership Deed dated [Date of Original Deed] (hereinafter referred to as the "Original Deed").

• WHEREAS the partners have mutually agreed to amend the Original Deed to incorporate a clause providing for the payment of remuneration to the working partners in consideration of their services.

• WHEREAS Clause [Clause Number] of the Original Deed permits alterations or modifications by mutual consent in writing.

NOW, THEREFORE, THIS AMENDMENT WITNESSETH AS FOLLOWS:

1. Addition of Remuneration Clause: The following clause shall be added to the Original Deed under the head "Remuneration of Partners", and shall be deemed to have effect from [Effective Date/Financial Year]:

   Remuneration to Working Partners:

   • The partnership firm shall pay remuneration to the working partner(s) for actively engaging in the conduct of the business of the firm.

   • The quantum of remuneration payable to each working partner shall be determined mutually by the partners from time to time, provided that it shall not exceed the maximum limits permissible under Section 40(b)(v) of the Income Tax Act, 1961, or any statutory modification thereof in force for the relevant assessment year.

   • The remuneration shall be calculated and paid on a [monthly / quarterly / annual] basis and shall be debited to the Profit and Loss Account of the firm as an expense.

2. Force and Effect: Save and except as expressly modified and amended herein, all other terms, conditions, clauses, and stipulations of the Original Deed shall continue to remain in full force and effect and shall be read harmoniously with this Amendment.

IN WITNESS WHEREOF, the parties hereto have set and subscribed their respective hands to this Amendment on the day, month, and year first above written.

Signatures of the Partners:

1. [Name of Partner 1]

2. [Name of Partner 2]

Witnesses:

1. Name: _________________ Signature: _______________

2. Name: _________________ Signature: _______________

💡 Key Statutory & Compliance Checkpoints (Income Tax Act, 1961)

• Prospective vs. Retrospective: To claim a deduction for partner remuneration under Section 40(b), the partnership deed must authorize the payment and specify the quantification method. Remuneration cannot be allowed retrospectively if the deed is amended later in the year unless explicitly drafted to apply from a specific permitted date (though prospective effect from the date of the supplementary deed or beginning of the financial year is standard practice).

• Section 40(b)(v) Limits: Ensure the remuneration does not exceed statutory book-profit slab limits:

  • On the first ₹3,00,000 of book profit or in case of a loss: ₹1,50,000 or 90% of book profit (whichever is higher).

  • On the balance of book profit: 60% of the remaining book profit.

• Working Partner Verification: Only working partners are eligible to receive deductible remuneration. Ensure the individual is explicitly categorized as a working partner in the deed.

A supplementary deed can record the change. Adapt this format to the existing deed and the partners’ agreement:

SUPPLEMENTARY DEED OF PARTNERSHIP

This deed is made on [date] at [place] by and between [names and addresses of all partners] (the “Partners”), being the partners of [firm name], carrying on business at [address].

The Partners refer to the partnership deed dated [original deed date]. They agree that, with effect from [effective date], the clause concerning remuneration to working partners is deleted and replaced with the following:

“Remuneration to working partners: The working partners shall be entitled to remuneration for each financial year, calculated in accordance with section 40(b)(v) of the Income-tax Act, 1961, within the limits prescribed therein, as amended from time to time. The remuneration payable to each working partner shall be [state the amount/formula or allocation basis]. The partners may determine the amount payable for a financial year by mutual agreement, subject to the above limits.”

All other terms of the original deed remain unchanged. The Partners have signed this deed on the date stated above.

Signatures:
[Each partner’s signature]
Witnesses: [Names, addresses and signatures]

For tax deductibility, the deed should specify the remuneration amount or a workable method of quantification; a general clause leaving the amount entirely to a later decision may not suffice. Ensure the amended terms are effective for the relevant period and execute the deed in accordance with applicable stamp and registration requirements.

Changing a remuneration clause is part of maintaining a firm’s deed, accounts and tax records consistently. Manual follow-up across documents and compliance tasks is difficult; automation reduces repetitive work while professional judgment remains in control. At Jir AI, our 2,000+ AI agents and 650+ integrations streamline GST, ITR, TDS, TCS and other compliance workflows, helping reduce manual workload by up to 70%. For a practical look at simplifying compliance workflows, connect with us on WhatsApp: https://wa.me/message/3HVOZ7HIY4ESC1