whereas partner's remuneration is is an allowable expenditure U/s 40b(ii), what should be the income of the partner when filing his individual return - is it the remuneration actually received by him, or the proportion of remuneration allowed U/s 40b(ii) ?
10 Replies
Sripada M
(CA)
(365 Points)
Replied 15 December 2009
It is only to the extent of amount allowed to the Partnership firm as deduction.
Otherwise, it amounts to double taxation.
santhosh
(CA)
(636 Points)
Replied 15 December 2009
What is Allowed in 40(b) for the Firm is only taxed in the hands of Partners.
Dinesh N
(Article)
(156 Points)
Replied 15 December 2009
"whereas partner's remuneration is is an allowable expenditure U/s 40b(ii), what should be the income of the partner when filing his individual return - is it the remuneration actually received by him, or the proportion of remuneration allowed U/s 40b(ii) ?"
Income will be the remuneration actually received from the firm, after providing for the deduction u/s 10 which will be to the tune of income taxed in the hands of the firm.
FATEMA
(CHARTERED ACCOUNTANT)
(719 Points)
Replied 15 December 2009
While filing the return of the partner in his individual capacity, the remuneration actually allowed by the income tax act should be taken into consideration because the same is allowed as appropriation of profits for the firm and the firm does not pay tax on it.
If the remuneration allowed by the income tax act is less than the actual remuneration rcvd by the partners then the remuneration as allowed by the income tax act should be distributed among the partners in the ratio of remuneration rcvd for the purpose of filing returns.
Lavanya shree
(Articles Assistant)
(45 Points)
Replied 15 December 2009
Thanx a lot to all of you guys... :)
JAY DESAI C.A.,C.S.
(Audit Senior)
(45 Points)
Replied 15 December 2009
The Proportion that is allowable to the partner under Sec.40(b) that proportion is taxable to the partner in his/her individual return
Sandeep Pandey
(CA FINAL)
(1306 Points)
Replied 16 December 2009
it will be taxable as income from business or proffession.......................
Airody Manjunatha Alse
(ca)
(100 Points)
Replied 16 December 2009
Remuneration received to the partners to be caliculated as per the section 40(b)(ii).in the firms income tax computation and Allowed portion as an expenditure in the firms, shall be considerred as the Income in the hands of the partner. Simple reason is to that extent is not taxed in the firm.
Bharat Khurana
(Student)
(153 Points)
Replied 19 December 2009
remuneration to partners is taxable in the hand of the partner under the head of income from profit and gains from business to the extent such remuneration is allowed to partnership firm
Recent Topics
- Clarity regarding Sec 16(4)
- GST ON HOTEL ROOMS details
- Relief for Delayed Filing of Tax Forms
- Expire stock
- INCOME TAX AY 25-26
- Experienced CA firm for accounting & auditing
- Regarding Perquisite Tax on ESOP - Unlisted Compan
- Casual Taxable Person under GST
- Extended Date of GSTR-1 for the month of July 2020
- NRO Interest - Taxed at source and in Foreign Coun
Related Threads
CAclubindia
