Salary of partners

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audit trainee
124 Points Posted on 08 February 2020
if partnership deed provides salary of each partner is 5000 pm . can we expensed more than 5000 pm each partner while finalising profits? or we have to redraft partnership deed ??
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On 08 February 2020 at 20:45 Report
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This discussion clarifies that partner salaries must strictly adhere to the amounts specified in the partnership deed. If you wish to pay partners more than the stated amount, the deed must be redrafted and amended accordingly. Any variations require formal changes to the agreement, and partner withdrawals are governed by the deed's clauses, not by partner will.

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PRACTICE
673 Points Posted on 08 February 2020
Salary should be according to partnership deed
you have to redraft agreement
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On 08 February 2020 at 21:07
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"Do the Right Thing...!!!"
128162 Points Posted on 09 February 2020
Yes... I agreed to Mr Dipesh Jha.,

If You will pay above 5k as Salary then You must be note this in deed as per above reply by expert...

while finalising profits?

- in this view no problem for sharing Profit to partners account and they can withdraw the same as their will...
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On 09 February 2020 at 07:28
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audit trainee
124 Points Posted on 09 February 2020
Thanks for the guidance experts..
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On 09 February 2020 at 09:02
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17269 Points Posted on 09 February 2020
Payment of salary must be in accordance with Partnership Deed. The Deed must provide the salary amount not exceeding maximum salary prescribed under Income Tax Act.

Any variation needs amendment in Deed.

Profit or Loss sharing in the ratio as per Deed.

Withrawals have to be in line with Clauses of Partnership Deed. It's not at WILL.
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On 09 February 2020 at 11:49
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"Do the Right Thing...!!!"
128162 Points Posted on 09 February 2020
No limits for Withdrawal from the current account of the partners... Will means Partner can withdraw the amount without any limit in the Book balance..
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On 09 February 2020 at 11:53
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17269 Points Posted on 09 February 2020
Withdrawal related powers are as per Partnership Deed only.

One may do everything in proprietory concern .
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On 09 February 2020 at 13:33
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"Do the Right Thing...!!!"
128162 Points Posted on 09 February 2020
In partnership deed preparing capital, PandL.... but, not for profit withdrawal from the capital (current account)...
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On 09 February 2020 at 13:47

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