RAMESH D MODI (Proprietor) (4869 Points)
05 June 2017
| Originally posted by : Madhavi Pandit | ||
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In the second calculation, if the amount after deduction of Remuneration and Interest is a loss, will the audit be necessary? |
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No.
Because, the income should be more than the maximum amount not chargeable to tax, which would be zero for the firm.
What is your opinion about it ma'am?
IF we don't use ITR 4(sugam) I believe,we can claim remunertion and interest on capital resulting in loss and audit won't be necessary (since we are not opting for 44AD). I have to see if the ITR utility accepts this and hope that the return is not rendered defective later.
If this is not allowed,it would be highly unfair to those partnerswho don't have any incomeother than interest on capital & remuneration. The whole of book profit will be taxed @ 30% in firm's hands where actually the firm has paid salary to partners.
Converting it into proprietorship will be beneficial then.
More views are welcome.
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