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Standard deduction of 40000

Ankit Agarwal (student) (73 Points)

26 September 2019

Can a partner can take standard deduction on salary he received from firm?

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13 Replies

RAJA P M ("Do the Right Thing...!!!") (127177 Points)
Replied 26 September 2019

If he is received salary as per sec 17(1) then yes he can claim that std deduction .

1 Like

Kapadia Pravin (17249 Points)
Replied 26 September 2019

NO STANDARD DEDUCTION IS AVAILABLE.

Salary received from firm is treated as PGBP in the hands of partner.

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Ankit Agarwal (student) (73 Points)
Replied 26 September 2019

What salary as per sec 17(1) include or means?

As in my case partner is getting 30000 pm salary

Ankit Agarwal (student) (73 Points)
Replied 26 September 2019

Then his salary which be shown under which heads of income while preparing computation?

Kapadia Pravin (17249 Points)
Replied 26 September 2019

NO STANDARD DEDUCTION IS AVAILABLE.

Salary received from firm is treated as Business Income (under profits and gains from business ) by the Partner.
(ITR5 - schedule BP)

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Ankit Agarwal (student) (73 Points)
Replied 26 September 2019

@ kapadia ji thanks for the response

RAJA P M ("Do the Right Thing...!!!") (127177 Points)
Replied 26 September 2019

(As in my case partner is getting 30000 pm salary )

If the salary (remuneration) received from partnership firm then it's not under the head of Salaries...

in case the partner earn salary from any other way (for working employee) then he can avail such deduction...

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Kapadia Pravin (17249 Points)
Replied 27 September 2019

Salary is payable to working partner only.
It can't be paid to non-working partners.

sabyasachi mukherjee (26073 Points)
Replied 12 October 2019

Ankit you hv not mentioned whether partner has profit sharing ratio or not .
He may be salaried partner.
If salaried then he can claim standard deduction.
The employer is bound to furnish form 16.

Ankit Agarwal (student) (73 Points)
Replied 13 October 2019

He is having 1/3 share in firm and is working partner only

Suresh Thiyagarajan (Student) (3986 Points)
Replied 13 October 2019

1. As per sec 28(v), if a partner is in receipt of salary, interest, bonus, commission or remuneration, by whatever name called will be taxable in the hands of such partner as business income.
2. Hence, the salary received from his own firm will be taxable as business income and the standard deduction will not be available for such salary income.
3. The standard deduction will be applicable only for a salaried employee (Employer and Employee relationship)
4. In your case, the standard deduction will not be applicable for salary received from a firm in which you are a partner.
5. The share of partnership does not matter in this scenario.
Please correct me if the above solution has an alternative view.

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sabyasachi mukherjee (26073 Points)
Replied 13 October 2019

So Ankit now its clear if you are having 1/3 profit share then u cannot claim standard deduction.
Mr.Suresh u are absoloutely correct.

2 Like

Ankit Agarwal (student) (73 Points)
Replied 13 October 2019

Originally posted by : sabyasachi mukherjee
	So Ankit now its clear if you are having 1/3 profit share then u cannot claim standard deduction.Mr.Suresh u are absoloutely correct.