06 December 2007
As per sec 28(v)of the Income Tax Act, 1961 partner's salary should be taxable as a business income(under the head incomes from business or profession)while filing the individual return of the partner. why cant it be taxed under the head incomes from other sources? wat is the logic behind that? in either, ultimately cases the salary will be taxed. so i want to know the logic behind that.
07 December 2007
THE profits of business is distributed amongst partners of the business. Partnership Act also defines partnership as relation between persons who has agreed to share profit .So whatever partner get from partnership is in fact his share of profit . Now it is different thing that method of computing share may be different . Even if you call it salary it is share. therefore it should be busines profit.
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