12 June 2009
My client is a partnership firm and they are in a business with exemption under 80IB. During the year they earned profit in crores. Now, i want to finalise their accounts. Can i show minimum remuneration to partners and maximum amount of profit distribution as profit is exempt under section 80IB. ????
12 June 2009
For that you need to see the salary clause details from partnership deed. If it says as per sec 40(b) then do such calculations as per sec 40(b). In such case you will get the maximum benefit of salary deductible as per income tax laws.
If partnership deed says 10L to each then this should be 10L in accounts but income tax computation partners salary will always be calculated as per sec 40(b).
12 June 2009
You can provide remuneration in the accounts as you wish. But for income tax computation remuneration should be in accordance with the provisions of the partnership deed subject to the restrictions contanied in section 40(b) of the income tax Act,1961.
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