I am working as an account in a partnership firm, the profit for the Financial year 2012-13 is 6000000/- by which the eligibility salary comes Rs. 3690000/-, but due to high tax , can i give salary to partners more than eligibility salary (more than 36,90,000/-)?, please give me solution.
Dear Niranjan,
No, the salary can't exceed the amount specified u/s 40(b) as rightly calculated by you (i.e. Rs. 3690000). There's no other way-out to exceed the said amount.
However, you may pay interest to the partners on their capital @ 12% (if they are entitled for interest as per partnership deed). That might help a bit.
Best Regards,
CA Lovely Arora
ca.lovelyarora @ gmail.com
The Excess salary given shall be disallowed by the AO.
Hence, you cannot give salary beyond the said limit.
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