24 October 2012
hello i wnt to know that what is the provision for tax on partnersahip & if firm pays the tax i.e.30% than partners are individually liable for taxation or not & IF YES than in which brakate????????
24 October 2012
Share of profit from the partnership firm is exempted income in the hands of individual partners. So due to the other income(i.e other than profit/loss from the partnership firm) his total income exceeds maximum basic tax exemption limit according to the individual assessees then only required to pay income tax according to individuals tax rate slabs.
24 October 2012
which profit is credit to the partners capital account as share of profit from the partnership business is the exempted income. And remuneration/salary and interest on capital are the taxable incomes in the hands of partners.
24 October 2012
As per provision of Section 10(2A) of the Income Tax Act Share of profit to a person who is a partner of a Partnership Firm which is seperately assessed to Tax is exempt in his hands. Thus, if the firm has paid tax on its profits, individual share of the partner will not be taxable in his hands.
However, as per provisions of Section 28(v) any interst,bonus,salary,comission or remuneration, by whatever name called, due to, or recieved by, a partner of a firm from such firm( to the extent allowed as a deduction u/s 40(b) to the said firm) shall be taxable in the hands of the Partner under the head ' Profits & Gains From Business & Profession'
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