can we paid to the partners interest in itr.
7 Replies
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(185456 Points)
Replied 10 January 2018
As per section 40(b) of IT act, 1961.......
How much remuneration or interest to partner is allowable?
- a) Interest payable to partners shall not exceed 12% per annum.
- b) Remuneration payable to partners shall not exceed the following limit:
- On first Rs. 3 Lakhs of book profit or in case of loss - Rs. 1,50,000 or 90% of book profit, whichever is more;
- On the balance of the book profit - 60% of book profit.
Shahul Batcha
(22 Points)
Replied 10 January 2018
Can we declare in16-17 and17-18 it. Some people say in17-18 onwards we cannot declare partners interest.
JEEVIKA AND CO
(PROPRIETRIX)
(153 Points)
Replied 10 January 2018
Sir.,
How to calculate Interest for capital...? As per Deed 12% allowed as Interests in our Firm...
i) Introduced capital Rs. 125000 - 4 Partners = 500000
ii) PY c/f capital Rs. 243550 - 4 Partners = 974200
Please give me Calculation or Examples... I can't understand this way of Interest calculations...
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(185456 Points)
Replied 10 January 2018
@ Shahul Batcha: Yes, as per amendment in finance act, 2016 (effective AY 2017-18 & onwards)........ any firm declaring income under pressumptive assessment (u/s. 44AD/44ADA) is not allowed to deduct partner's interest & remuneration from such declared income.
But for normal assessment, there is no such restriction.
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(185456 Points)
Replied 10 January 2018
@ Jeevika & Co....... Interest is paid over the Capital balance amount and not just over capital introduced.......... in your case, if no other capital introduced or withdrawn by partners, it is calculated on total of Rs. 9,74,200/- and credited to each partner's account as per its share.
But note that under presumptive assessment the same is not allowed to be deducted.
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