LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Whether Rent Paid to Partner is covered u/s 40(b) ?

Jai Mishra (16 Points)

10 April 2020

WHY RENT PAID TO PARTNER IS NOT CONSIDERED u/s 40(b) ???

The Language used in section 40(b) is "payment of salary, bonus, commission or remuneration, BY WHATEVER NAME CALLED."

So, Rent should also be considered in BY WHATEVER NAME CALLED.

Reply
Follow
Share

3 Replies

CA Thuppada Aruna (Job) (15 Points)
Replied 11 April 2020

As per section 40(b), only payment of salary, bonus, commission, remuneration are included. The simple thing observed here is that all these payments, partners are supposed to report under PGBP in their Income Tax Return, so controls have been laid. Whereas for Rent, whatever the amount paid as rent is considered under HP income, which has a for standard ruling for all. So, the same is not included in 40(b)..

CA Naveen Chand (Chartered Accountant) (12729 Points)
Replied 11 April 2020

rent is not covered here

any amount paid to partner as rent is allowed as deduction and the same is not covered by Sec 40(b)

Jai Mishra (16 Points)
Replied 27 April 2020

Originally posted by : CA Thuppada Aruna
	As per section 40(b), only payment of salary, bonus, commission, remuneration are included. The simple thing observed here is that all these payments, partners are supposed to report under PGBP in their Income Tax Return, so controls have been laid. Whereas for Rent, whatever the amount paid as rent is considered under HP income, which has a for standard ruling for all. So, the same is not included in 40(b)..