Income Tax Query

Tax queries 864 views 6 replies

Rajesh

Professional

44 Points Joined June 2010

Hi Experts,

I am partner of XYZ firm, can any expert help me to calculate my tax liabilities as below.

Query:

Book Profit before Remuneration & Interest Rs. 2148059

Amounts disallowable under section 40 Rs. 500000

Less Remuneration/Interest Rs. 1493960

Gross Total Income (Firm) 1154100.00(rounded)

Firm Tax Paid:Rs.442692.00 (Tax Deducted at Source)

Question: What would be the tax liabilities for the firm ?

A.Y. : 2010-2011

PARTNERS SHARE OF PROFIT/REMUNERATION/INTEREST

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Divisible Income : 1154100 Normal : 1154100

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01/04/2009 To 31/03/2010

Share of Profit Share of Loss Remuntn. Allow Remuntn Interest Int @ 12% Share of Profit P.Type

Partner -A- 50 50 430000 505395 102980 102980 577050 W

Partner-B- 50 50 930000 1093064 30980 30980 577050 W

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Question: what would be the tax liabilities of partner A & B.

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Expecting a quick help on it

Regd. Rajesh Das

Replies (6)

Aditya Maheshwari

CA in Practice

35867 Points Joined June 2009

The amount allowable as a deduction from partnership firm is only liable for tax in the hands of the partners.

Rajesh

Professional

44 Points Joined June 2010

U mean to say,

Allow Remuntn of both partner is taxable it means

Partner -A- will have to pay tax on 505395

and Partner B- will have to pay tax on1093064

Can both partner take the benefit of Deductions Expenses relating to IV. (Section 15 and 16) i mean the expenses can minus from the salary, if yes then what would be the maximum expenses Allow

Please correct me if i am wrong.

Regads

Ninad Pandit

CA Final Student

254 Points Joined June 2008

Actual Remuneration given to both partners is taxable. it means
Partner -A- will have to pay tax on 532980
Partner -B- will have to pay tax on 960980
both partner can take the benefit of Deductions, Expenses minus from the remuneration received from firm.

Please correct me if i am wrong.

Rahul Agarwal

Future CA

217 Points Joined December 2007

Dear Rajesh,

Firstly the share of Profit that you receive from the firm is exempt u/s 10(2a)

Secondly, Partner -A- will have to pay tax on 532980
Partner -B- will have to pay tax on 960980

Thirdly both can claim benefit of deductions under Chapter VIA.

It is not possible to say the maximum benefit that the Partners can take. Please provide further information on that part of your ?

Regards,

Rahul

M .K. Jha

CA Final

484 Points Joined February 2010

Yes Rahul is right........

Dear Rajesh,

Firstly the share of Profit that you receive from the firm is exempt u/s 10(2a)

Secondly,

Partner -A- will have to pay tax on Rs 5,05,395 plus Int on capital @ 12% of Rs.1,02,980.

Partner -B- will have to pay tax on Rs.10,93,064 plus Int on Capital @ 12% of Rs. 30980

Thirdly both can claim benefit of deductions under Chapter VI-A.

Partner's remuneration & Interest taxable under the head of INCOME FROM BUSINESS PROFESSION not head of SALARIES. So, it cann't take deduction of section 16.........