Remuneration of Partner

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

18 July 2011 Hello Sir,

In a partnership firm there is three partner and they withdraw 20K each for every month so please tell me how i will do entry
will i pay remuneration for every month?
or
will i adjust it end of the year as drawing?

and please advise how i will do entry in tally

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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18 July 2011 Payment of remuneration to partners should be "in accordance with the provisions of partnership deed "with particular reference to section 40(b) of the income tax Act,1961 as regards the limits of such payment. Therefore, requested to see the deed and decide accordingly.

Amol Gopal Kabra (CA,CS,DISA)

Amol Gopal Kabra (CA,CS,DISA) (Expert)
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18 July 2011 Show these 20K per month as drawings. And the remuneration that each partner is eligible should be calculated as provided in the Partnership Deed. However, this remuneration is subject to allowance u/s 40 of Income Tax Act, 1961 for Income Tax purposes.

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Querist : Anonymous

Querist : Anonymous (Querist)

18 July 2011 then how will do entry in tally and what kind of ledger i will of in tally
just tell me please

Amol Gopal Kabra (CA,CS,DISA)

Amol Gopal Kabra (CA,CS,DISA) (Expert)
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18 July 2011 Partners Capital Account Dr. 20000
To Cash / Bank Account 20000
(Being amount withdrawn by partner)

Querist : Anonymous

Querist : Anonymous (Querist)

18 July 2011 Thanks Amol Gopal G

But tell me one thing more as you told me, the whole amount of drawing will transfer in capital account then how i will show drawing in partner's favor and for this there is any need of journal entry