I have bit confusion in partnership firm,earlier there is deduction from Net profit i.e remuneration of partner, share of profit and Interest on capital and remaining profit Tax has to be paid.
But now i have heard i cannot deduct remuneration of partner and interest on capital from net profit is it right. Then how to take out share of profit.
28 April 2018
Sir, If person opted 44AD did not get the benefit of deduction of remuneration to partner and interest on ,then how to calculate share of profit.
28 April 2018
After paid tax liability you will transfer the profit amount to Partners current account. It's fully exempted in the hands of partners.
For Ex : In case Two persons in the firm... Total Turn Over - Rs. 50,00,000 Profit @ 8% - Rs. 400,000... You will share the profit Rs. 100,000 / each...
But., We must pay tax liability @ 30% + Cess - Rs. 123,600...
28 April 2018
Sir, if no deduction of remuneration and interest on capital that means no requirement of current account of partners.Am i right Sir profit will directly transfer to Capital Account.
28 April 2018
Partners Current Account and Capital Account both are under Capital Nature...
Normally it's better to prepare current account (Under Capital) Ledger...
CAclubindia
