A Partnership Firm engaged in retail trade having a turnover of Rs. 15 Lacs wants to opt for Sec 44AF. Since remuneration & Interest to partners is allowed as deduction but within Sec 40(b) limits, my query is WHAT CONSTITUTES BOOK PROFITS in case a case ?
17 March 2010
The book profit will be before the Interest and Remuneration to the Partners. 5% of Gross turnover would be the book profit. However the Remuneration and interest under section 40b will further be reduced from the above book profit to derive the Taxable profit.
17 March 2010
Yes. The deemed profit u/s 44AF in the above case will be treated as the book profit of the firm within the meaning of clause V of section 40(b)
CAclubindia
