Section 44ADA query

Do the partner in the partnership firm need to consider the exempt income such as profit share, in the gross receipt, for the purpose of limit of Rs 50lacs under section 44ADA? 
Or can he consider only remuneration which is taxable under such partners hand as gross receipt?

 

Replies (5)
Quick Summary
This discussion clarifies whether a partner's exempt profit share should be included when calculating gross receipts for the Rs 50 lakh limit under Section 44ADA. It explores whether only taxable remuneration counts or if the total profit share needs consideration. The options for reporting income under Section 44ADA are also examined, particularly when remuneration is below the limit but total profit share exceeds it.

Share of profit is exempt in the hands of partner

Thanks but what about computation of gross receipt under section 44ADA?

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.

Thanks, can one choose option B if the remuneration is less than 50lacs but it exceeds Rs 50lacs when share of profit is added (which is exempt under Sec 10(2))?

Yes it can be availed

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