Partnership

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

13 September 2014 when calculating tax liability of a partnership firm, tax calculated on net profit after deducting partner remuneration or before remuneration!what is correct treatment

CA Devanand Jethanandani

CA Devanand Jethanandani (Expert)
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13 September 2014 Dear friend,

Tax is to be calculated after deduction of partners remuneration subject to below conditions,

1.) Remuneration to partners is authorized by partnership deed and

2.) It is allowed as deduction up to the limit mentioned u/s. 40(b)