17 October 2015
IN A PARTNERSHIP FIRM, THERE ARE TWO PARTNERS OUT OF THEM ONE IS ACTIVE AND OTHER IS INACTIVE DUE TO OLD AGE, SO ACTIVE PARTNER RECEIVES FULL SALARY AND DEBITED TO PROFIT AND LOSS ACCOUNT, WILL THE I.TAX AUTHORITY ALLOW THESE EXPENSES TO BE DEDUCTED FROM PROFIT . KINDLY REPLY
19 October 2015
If it is specifically mentioned in the 'instrument of partnership', salary to the 'working partner' will be allowed as an expense of the FIRM subject to the ceiling prescribed in section 40 (b) of the Income tax Act,1961.
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