partners remuneration

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 July 2010 in partnership deed it is meniotned that remuneration to both the partners shall be payable as per section 40 (b) of the IT act, and shall be reduced to Nil if there is a Loss.

Pls. clarify that is it mandatory to amend the Deed for giving hiegher rem. i.e up to Rs. 3.00 lacs to partners

CA Sanat Pyne

CA Sanat Pyne (Expert)
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30 July 2010 Yes it is mandatory to ammend the deed. If you are paying remuneration higher than the limit, the excess amount will be disallowed in the hands of firm however the the excess amount will not be taxable in the hands of partner.

Querist : Anonymous

Querist : Anonymous (Querist)

30 July 2010 which limit Rs. 1 lacs or Rs. 3 lacs

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CA. Anoop Gadia

CA. Anoop Gadia (Expert)
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30 July 2010 if you give more than 3 lac's 90% than it is non detectable to firm.

CA Sanat Pyne

CA Sanat Pyne (Expert)
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31 July 2010 Higher than the limit of 40(b) Then balance amount will be taxable in the hands of partner.
and amount allowed u/s 40(b) will be taxable in the hands of partner.