17 December 2013
Dears Whether it is possible for a proprietory firm can accept loan on profit sharing basis by a/c payee cheque or draft. that is for loan amount of Rs.500000 contributed by Mr A into proprietory firm of B Mr A will receive 40% profit of the proprietory firm. Is there any problem under IT Act. How it is treated
17 December 2013
It may not be treated friendly by the IT Department. . Such sharing of profit can be tantamount to a partnership or an AOP and may be subjected to higher rate of Tax. .
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