21 October 2024
what is taxed in partner hands? rem. debited to pl of firm or admissible remuneration in firm's it return? my view--> admissible rem. irrespective of what is debited in firm's prof loss. Am i correct?
21 October 2024
The remuneration debited to P&L is taxable in the partner's hands, regardless of whether it's fully admissible as a deduction for the firm. If the remuneration paid to partners exceeds the permissible limits under Section 40(b) of the Income Tax Act, the excess amount is not allowed as a deduction for the firm but is still taxable in the hands of the partner.
CAclubindia
