HELLO FRIEND,
one of my client come under provision of this section. thier actual profit is1,21,000(after providing i nterest of44,000. and no remuneration is debited ) while as per profit as per 8 % profit on turnover comes to rs1,68,000. the client is a partnership firm.
Now the query is that for calculating remuneration u/s 40(b), what will be taken as book profit- 1,21,000 (assuming that same is the book profit) or presumed profit of1,68,000?
thanks...
If the Firm opts for Section 44AD, then Section 40(b) is NOT APPLICABLE, that means any amount is allowed as Remuneration to Partners,,
for firm, tax is charged from Rs 1/- so why hue and cry over the limit? if firm declare"TAXABLE PROFIT" below 8% then............. below 8% any amount is subject to tax audit u/s 44AB, i.e firm has to either maintain 8% or higher or get audited.
| Originally posted by : Ravikant | ||
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If the Firm opts for Section 44AD, then Section 40(b) is NOT APPLICABLE, that means any amount is allowed as Remuneration to Partners,, |
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IT IS BETTER TO PREPARE BOOKS OF ACCOUNTS AND SHOW THE ACTUAL PROFIT WHICH IS MORE THAN 8% AND DEDUCTS INTEREST.
NO AUDIT IS REQUIRED BECAUSE THE PROFIT BEFORE SALAY TO PARTNERS IS MORE THAN 8%.
agree with surendra agarwal
Gdm Dear Parth Shah,
If you go for Section 44AD, you have to show 8% profit.
secondly for calculating remuneration u/s 44AD(2) you have to follow sec40(b) , due to which you have to take 8% profit (i.e.Rs.168000/- in your case).
| Originally posted by : ashutosh bhardwaj | ||
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Gdm Dear ashutosh bhardwaj section 44(b) is still applicable plz refer 44AD(2). Mr. Surendra , actually it is 44AD(2). |
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