A Partnership Firm has closed down its business. It has given its property on Rent.
Can the partners take a minimum remuneration from the firm and do such remuneration will be treated as business loss which should be allowed as set off against House property Income.
Yes as per the provisions of the Act i.e. sec 37(1) r.w.sec 40(b), the minimum remuneration will be allowed as deduction in computation of Business Income of the Firm. Now if there is a loss in Business Income then the same will be eligible for set off against House Property Income as per set-off provisions of the Act.
Ofcourse Firm can show the Remuneration paid to Partners as loss to it and can Setoff againist House property Income but In view of partners, they have to pay tax on the said remuneration which were Received from Firm
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