Salary of partners

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amit jain (Querist)
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29 July 2011 Hi,

If partnership deeds provides salary of rs 20000 per month to two partners but firm dont have profit to give the salary every month is it mandatory to provide the full year salary or only for the months in which it was actually provided to partners...is it taxable on accrual basis or on payment basis..urgent

Thanks

Amit

hitesh

hitesh (Expert)
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29 July 2011 it will depend upon the accounting policy followed by the firm... it is not mandatory...

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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29 July 2011 Full year salary is to be provided since the partnership deed contains a specific clause. .

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hitesh

hitesh (Expert)
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29 July 2011 still think that it is not mandatory, as it may be the policy of the firm to provide for or not.. there are various expenses which are specified in agreements and not provided for. Also, in case partners forego their salary, the same need not be provided for..