07 July 2010
my remunaration clause is as follow as per partnership Deed:
The Total Remuneration payable to the working partners shall be worked out as under :
In case of loss or Book profits Rs.50,000/- or 90 % of Book upto Rs.75,000/- for the year. profits whichever is higher.
On an amount of Book profits 60% of excess over Rs.75,000/- but not exceeding Rs.75,000/-. Rs.1,50,000/- for the year.
On Book profits exceeding 40% of the excess over Rs.1,50,000/- for the year. Rs.1,50,000/-.
Explanation : For the purpose of this clause the expression “Book Profits” shall mean the Book profits as defined in Sec.40(b) of the Income Tax Act,1961 or any statutory modification or re-enactment thereof for the time being in force.
now i want to know that weather my cleint is able to claim remunaration as per new ammendment u\s 40(b)under financial act 2009.
Please reply with Explanation whether it's yes or no. if answer is No what should i have to do for getting meximum remunaration as per act ammended
07 July 2010
First u will have to amend the partnership deed as originally the partnership deed did not contain the clause for remuneration at higher rate.
IF u read Section 40(b)(iii) it reads as (iii) any payment of remuneration to any partner who is a working partner, or of interest to any partner, which, in either case, is authorised by, and is in accordance with, the terms of the partnership deed, but which relates to any period (falling prior to the date of such partnership deed) for which such payment was not authorised by, or is not in accordance with, any earlier partnership deed, so, however, that the period of authorisation for such payment by any earlier partnership deed does not cover any period prior to the date of such earlier partnership deed; or
So first amendment in deed is needed. then only u can pay remuneration at the amended rate.
08 July 2010
as my remuneration clause their is one explanation about book profit in which their is a written that to be any statutory modification or re-enactment thereof for the time being in force.
so can we say that our remuneration is authorised by deed?
please give clarification about this statement in my deed.
For the purpose of this clause the expression “Book Profits” shall mean the Book profits as defined in Sec.40(b) of the Income Tax Act, 1961 or any statutory modification or re-enactment thereof for the time being in force.
So it is for calculation of book profits only and not for any change in the remuneration %.
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