Partners remuneration
This query is : Resolved
23 August 2016
Helo Sir,
If I book Profit in Partnership firm of Rs. 13,00,000/ - Approx , then how much remuneration allow of Partners.
If I book Profit in Partnership firm of Rs. 13,00,000/ - Approx , then how much remuneration allow of Partners.
23 August 2016
Dear Sir,
As per Section 40(b) the following conditions needs to be satisfy in order to get deduction of remuneration
1. Remuneration should be paid only to a working partner.
2. Remuneration must be authorized by the partnership deed.
3. Remuneration should not pertain to period prior to partnership deed.
4. Remuneration should not exceed the permissible limit.
If all the above conditions satisfied than you can pay remuneration to partner as per below limit to get full deduction of remuneration
1. If Book Profit is negative : Maximum Deduction Rs. 150000 as per section 40(b)
2. In case Book profit positive:
On first 3 lakh of Book Profit : 1.5 lacs or 90% of Book profit whichever is higher
On the Balance Book Profit : 60% of Book profit
In your case if your 1st 3 conditions have been fulfilled than below amount of remuneration is allowed for deduction (assumed that no remuneration debited in P&L account to arrive at 13 lacs profit and all relevant adjustments as provided in section 28 to 44DB is considered)
1. 300000*90/100=270000
2.1000000*60/100=600000
Means 270000+600000=870000.
Thanks.
As per Section 40(b) the following conditions needs to be satisfy in order to get deduction of remuneration
1. Remuneration should be paid only to a working partner.
2. Remuneration must be authorized by the partnership deed.
3. Remuneration should not pertain to period prior to partnership deed.
4. Remuneration should not exceed the permissible limit.
If all the above conditions satisfied than you can pay remuneration to partner as per below limit to get full deduction of remuneration
1. If Book Profit is negative : Maximum Deduction Rs. 150000 as per section 40(b)
2. In case Book profit positive:
On first 3 lakh of Book Profit : 1.5 lacs or 90% of Book profit whichever is higher
On the Balance Book Profit : 60% of Book profit
In your case if your 1st 3 conditions have been fulfilled than below amount of remuneration is allowed for deduction (assumed that no remuneration debited in P&L account to arrive at 13 lacs profit and all relevant adjustments as provided in section 28 to 44DB is considered)
1. 300000*90/100=270000
2.1000000*60/100=600000
Means 270000+600000=870000.
Thanks.
Message likes :
1 times
24 August 2016
thank your very much sir
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Query reg: Accounting standard, Indian Accounting Standard, IFRS, GAAP, Cost Audit, Frontend audit
- GST Refund SB005 Error
- PAYMENT TO OPEN AI AND ENVATO ELEMENT
- Issue of gst e invoice
- Interchangeable words in accounts
- Adjusted profit/Loss in the case of LLP and Pvt. Ltd.company
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
Trending Online Classes
-
Excel Mastery Program
CA Rishabh Pugalia
CAclubindia
