Whether remuneration is taxable under the hands of partners if firm is under presumptive taxation and remuneration is not allowed as deduction?
Whether remuneration is taxable under the hands of partners if firm is under presumptive taxation and remuneration is not allowed as deduction?
Under presumptive scheme of taxation the remuneration to partners will be deemed to have been allowed just like depreciation. Hence, it will be fully taxable in the hands of the partner. The question of limits of Sec. 40(b) will not arise as it is deemed to have been allowed in full.
From A.Y 2017-18 & onwrads Deduction U/S 40(b) is not allowed for calculation Income U/S 44AD i.e presumptive taxation. Hence Now U/S 44AD minimum 8% of Turnover will be treated as Income for the Partnership Firms.
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