tax saving

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

26 March 2010 We are a partnership firm having four partners can you suggest us the method of mininising our tax liability.
like salary to partner or interest on salary to partners and some other tried and tested method

Aditya Maheshwari

Aditya Maheshwari (Expert)
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27 March 2010 you can give interest on capital to partners @ 12% p. a.

you can also give remuneration to partners as below:
“(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”.

This will eat up chunk of the profits of the firm