Professional Fees to Partners

This query is : Resolved

ATUL U ANAVEKAR (Querist)
Follow

17 December 2010 Dear All,

Is it admissible to pay professional fees to the partners of a firm and claim a deduction from profit.

WIll the professional fees paid considered as salary for section 40.

Manmohan ACA, CS

Manmohan ACA, CS (Expert)
Follow

18 December 2010 it will be treated as remuneration. partner is expected to provide his full expertise to business and shall not be remunerated for any excess service provided.

Message likes : 1 times

ATUL U ANAVEKAR

ATUL U ANAVEKAR (Querist)
Follow

18 December 2010 Thank you Manmohan.

Would be grateful if you could provide me with some case law on the same.

Upgrade to CAclubindia Pro. Subscribe Now!

HUZAIFA HUSSAIN

HUZAIFA HUSSAIN (Expert)
Follow

18 December 2010 DEAR ATUL

PARTNER CAN BE PAID EXTRA FEES IF HE APPLIES HIS SKILL WHICH OTHER PARTNERS ARE INCAPACITY TO PROVIDE. SUCH INCOME CAN BE CONSULTANCY CHARGES FOR HIS EXTRA SKILL AND NOT REMUNERATION.

Message likes : 1 times