Kindly suggest me on following confusion. That i have a partnership firm running a business my total turn over is Rs 3000000/- and my book Net profit is Rs 300000/- before considering partners salary or remuneration and i have not any scheme. Now i want to know if i consider the partner salary as per one lakh per year per partner total amount of salary 200000/- in this way my book profit became less than 8 %. Kindly suggest me is there any problem with this working and if this working is not correct i have to tax audit.
22 August 2018
If you want file Tax Returns under 44AD you have t declare income 8% of Gross receipts , after adjusting all Exps including Depreciation, Partner Salary, Interest on Capital Etc other wise you will be liable for tax audit.
Partner Salary allowed as per 40(b) allowed (a) on the first Rs.3,00,000 of the book-profit or in case of a loss Rs.1,50,000 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.
CAclubindia
