remuneration to partner

This query is : Resolved

ALPA Sukhia (Querist)
Follow

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

Late CA Sampat Jain (Expert)
Follow

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

Anjani Pratap Tiwari

Anjani Pratap Tiwari (Expert)
Follow

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.

Upgrade to CAclubindia Pro. Subscribe Now!