partnership remuneration

(a) on the first Rs. 3,00,000 of the book-profit or in case of a loss = Rs. 1,50,000 or at the rate of 90 per cent of the book-profit, whichever is more, (in your case its 90%)

(b) on the balance of the book-profit = at the rate of 60 per cent

Dear Deeraj,

This provision can be applied only when the partnership deed has been amended by the firm as per the amended provision of Income Tax Act,1961.

 Regards

1. Income of firm is chargeable to tax after deduction of remuneration to partners.

2. Partners not require to pay tax on the share of profit  of the firm in their hands.

3.10 in normal case and 20 in case of banking

In case of Net profit exceed 20lakhs then partner remunneration caclulated as below

a) First net profit of 300000 lakh Then 90% of 300000

b) Balance of profit Then 60% of balance of profit

AND

Partner remunneration is fully allowed as deduction 

AND

Partner remunneration is taxable when partner will filed his individual IT return if exceed the limit

Originally posted by : Srikanth
	1. Income of firm is chargeable to tax after deduction of remuneration to partners. 2. Partners not require to pay tax on the share of profit  of the firm in their hands. 3.10 in normal case and 20 in case of banking

whatever u wrote, i cant understand..

and please correct me if i m wrong

Parter's Maximum Remuneration =Rs. 2,70,000+10,20,000= Rs.1290000 /-

(Amount Chargeable As Per Slab Rate To Individual Partners )

Firm's Chargeable Income = Rs. 20,00,000-12,90,000= Rs. 7,10,000 /-

(Amount Chargeable At the rate of 30%+3% education cess & shec)

is it sufficient... ???

Dear Mr Dheeraj,

As per your above example, you have mentioned the taxable income as Rs 7.10 lacs, and the rate of tax is mentioned as 30% + 3%.  My doubt is whether the +3% cess is on the 30% tax figure of Rs 2.13 lacs, or the total chargeable figure of Rs 7.10 lac?

2% education cess 

1% Secondary & Higher secondary Education cess

paid on income tax amount payable ( not on profit)

1. What is the maximum remuneration which can be paid to partners in a partnership firm, if the profits exceed 20 lacs p.a?

a) on the first Rs. 3,00,000 of the book-profit or in case of a loss = Rs. 1,50,000 or at the rate of 90 per cent of the book-profit, whichever is more, (in your case its 90%)

(b) on the balance of the book-profit = at the rate of 60 per cent

2.

Partnership firm is taxed @ 30.9%

3.

Taxable income is derived after deducting remmuneration

4.

Partners are entitled to pay tax on remmuneration received by them from the firm and it does not lead to double taxation

5.

The max number of partners is 20 incase of banking and 10 in cas of others