Agriculture Income

This query is : Resolved

Pratik Shah (Querist)
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14 September 2009 A Partnership firm (with 3 partners having equal share) is having purely an Agriculture Income of Rs. 10,00,000 out of Rs. 2,00,000 each goes in paying interest and remuneration to the partner. So, what will be tax implication for both partner and firm?

Late CA Sampat Jain

Late CA Sampat Jain (Expert)
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14 September 2009 AS PER SECTION 28(5) FOLLOWING AMOUNT IS BUSINESS INCOME
any interest, salary, bonus, commission or remuneration, by whatever name called, due to, or received by, a partner of a firm from such firm :

Provided that where any interest, salary, bonus, commission or remuneration, by whatever name called, or any part thereof has not been allowed to be deducted under clause (b) of section 40, the income under this clause shall be adjusted to the extent of the amount not so allowed to be deducted

NIL INCOME TAX ON THE FIRM HAVING ONLY AGRI INCOME