Here net profit is app. 3 lakhs which is more than 8%, so no need of any tax audit.

Now whatever amount is shared by partners out of the capital (about 2.10 lakhs after tax) is taxexempt in the hands of partners.

Dear Sir.,

The same way to my query but values are different and profit is above 8%.. Not provide remuneration before the 8% profit.

So, In our view we ll pay tax on the 8% < above value... Ex : Rs. 300250 X 30% = 90075 + Cess + Interests.

After It's transfer to Capital Account not called Remuneration....

If we ll claim remuneration after the value of 3 lakhs (3 lakhs * 90% = 270000) and show the taxable value RS. 70000 then we ll go to Tax Audit u/s 44AB. Otherwise no need remuneration / less than 8%...

Am I correct Sir...

Yes......... Dear.

Capital amount is net profit minus taxes(with interest & cess) paid.......... Distribution to partners of the capital amount is taxexempt.   But any distribution before hand is taxable.

Originally posted by : Dhirajlal Rambhia
	Yes......... Dear. Capital amount is net profit minus taxes(with interest & cess) paid.......... Distribution to partners of the capital amount is taxexempt.   But any distribution before hand is taxable.

But any distribution before hand is taxable.

Dear Sir., 

What kind of distribution available...?

In case the partners take monthly salary* Rs. 10000 x 12 = 120000... Then we can show the above profit Rs. 3 lakhs or reverse the Remuneration + Profit = 420,000 Profit or Only Rs. 3 lakhs....

Remuneration to partners is first added to profit, so that way net profit comes to 4.20 lakhs.

But in case of normal assesment, the remuneration is allowed as deduction (& the same is taxable in partner's hand) so, you can declare 3 lakhs profit, no problem.

But in case of presumptive assessment u/s. 44AD, the remuneration is not allowed as deduction.

Thank you for the all replies sir...

Most Welcome, Dear

Respected Sir.,

Thank you for your resolving...

One more query please...

Which deductions are allowed in Partnership firm under Compudation sheet...?

Our Company (Partnership Firm) give some times donations to Trusts and some childrens homes. Can we take it under donation head...? And how many percentage..?

This is the donation receipt :

Dear,

Donation being a non business expenditure, it is disallowed u/s. 37 of I T Act, while computing Business Income;

but may be allowed U/s 80G if it is an eligible donation while computing taxable Income.

In this particular case, the trust is not registered to accept donation under sec. 80G, thus the same is not deductible u/s. 80G also.
 

Thank you Sir...

Respected Mr Dhirajlal Rambhia Sir.,

Please give your valueable solution as per above replies...

If A partnership T/O Rs. 40,00,000 in FY 2016-17 also keeping books of accounts...

Total Expenses Rs. 36,50000 include remuneration. We ll show the profit Rs. 350,000 (8.75%)....

In above expenses including Partners Remunerations, Interests and Depreciation....

Is it right way...?

The remuneration taken by 2 partners rs. 240,000 (10000 p.m * 2)...

Please give reply...

1.   Correct, under normal assessment of trading business of firm ........ where P&L account and Balance Sheet of the firm submitted within ITR 5.  (Not liable to audit)

2. The remuneration and interest paid to partners is taxable in their individual hands..

SIR., THANK YOU FOR YOUR ALL REPLIES... AS ABOVE VIEW., IF WE ACCOUNT THE REMUNERATION IN BEFORE OF THE 8% THEN WE CAN PAID THE ABOVE 8% PROFIT AND ALSO INCLUDE THE REMUNERATIO IN EXPENSES HEAD...

NO RESTRICTIONS...?

ITS MEAN

TURN OVER RS.5000000

DIRECT EX RS. 2500000

INDIRECT EX RS. 2000000 (INCLUDE REMUNERATIONS & INTERESTS)

NETT PROFIT RS. 500000..... IS IT CORRECT WAY SIR...