24 April 2011
Please explain me the calculation of partner's remuneration (financial year 2010-11). what does it mean:- (asthe act says)
(a) on the first3,00,000 of the book-profit or in case of a loss1,50,000 or at the rate of 90 per cent of the book-profit, whichever is more; (b) on the balance of the book-profit at the rate of 60 per cent :]
(does it mean remuneration can exceed Rs. 150000 going with only point (a) )
Take an example:
A firm has three partners. Only one partners (say A) is working partner and other two (say B & C) are partners for benefit. Firm makes profit of 300000 in financial year 2010-11. PArtnership deed authorize for interest payment to partners @ 12%p.a.
Interest amounts as follows: A-25000 B-40000 C-50000
now going for calculation of Partners's remuneration:
How much amount of Net profit shall be taken (for calculation) at which Rate of 90% shall apply? Will it be 3,00,000 or 1,85,000 (300000-25000-40000-50000) or 2,50,000 (300000-50000) or something else ???
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