remuneration to partner
This query is : Resolved
ALPA Sukhia
(Querist)
11 September 2009
If a partner is HUF, can he get remuneration as partner? and While calculating the tax of partnership firm, can we get deduction from profit as partners salary U/s. 40a
Late CA Sampat Jain
(Expert)
11 September 2009
INCOME OF HUF IS WHAT ARISES FROM CORPUS OF THE HUF.......REMUNERATION IS FOR WORKING , WHICH IS INDIVIDUAL WORKING.
SO REMUNERATION PAID IS REMUNERATION TO IND AND NOT HUF HENCE NOT ALLOWABLE U/S 40a
SO REMUNERATION PAID IS REMUNERATION TO IND AND NOT HUF HENCE NOT ALLOWABLE U/S 40a
Anjani Pratap Tiwari
(Expert)
11 September 2009
As per section 40(b) remuneration should be allowed as deduction only for working partner if a huf is working partner and authoried by the partnership deed he can get the remuneration.But the as per 40(b) an individual who is actively participate in running the business is allowed for remuneration. One viw is that if the karta of the HUF participates in runing the bussiness he can be allowed for remuneration.
Ratan Sharma
(Expert)
11 September 2009
No, HUF can not be a working partner. Therefore deduction u/s. 40(b) not allowed.
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