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Requirement of tax audit for partners
Remuneration and interest received from partnership firm by partner exceeds RS one Crore. Partnership firm is under tax audit. whether individual partner will be required for tax audit as remeneration and interest received by partner exceeds rs. one crore each?
Replies (5)
There are mixed opinions on this issue.
Since these remuneration , interest covered under PGBP , it's better go for the provisions of PGBP
Option A – The partner will offer his entire remuneration as income and pay tax
Option B – Avail Section 44ADA and offer 50% of his remuneration as income and pay tax
Option C – If expenditure is more than 50%, get books of accounts audited and pay tax
Since these remuneration , interest covered under PGBP , it's better go for the provisions of PGBP
Option A – The partner will offer his entire remuneration as income and pay tax
Option B – Avail Section 44ADA and offer 50% of his remuneration as income and pay tax
Option C – If expenditure is more than 50%, get books of accounts audited and pay tax
Tax Audit of individual partners not required. 99% sure
But individual partners remuneration comes under special business
Audit is applicable based on turnover of the assessee. Partner does not have any turnover. The firm has the turnover. So no audit for Partner.
Turnover need not be sales but even gross receipts are also relevant
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