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Partnership return u/s 44AD

Anuj (article) (24 Points)

16 August 2022

can partners remuneration and interest be deducted from declared 8% profit u/s 44ad.

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4 Replies

Shruti (Student ) (586 Points)
Replied 17 August 2022

No 8% profit includes only business profit and losses. Partners remuneration and interest are part of profit and loss appropriation a/c.

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (182282 Points)
Replied 17 August 2022

Ms. Shruti is correct in a way. But as per your deed if you need to distribute the profit, you can deduct salaries first and then shares in the profit. The total amount will be tax free in the hands of Partners.

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CA Rashmi Gandhi (Chartered Accountant) (86323 Points)
Replied 17 August 2022

8% Profit is after deducting remuneration and interest

1 Like

Sai Allu (754 Points)
Replied 21 August 2022

Audit u/s 44AB is applicable if he is declaring income lower than thereafter specified u/s 44AD. But, section 44AD is not applicable to Agency, Commission and Brokerage. Hence, he can declare income less than 8%.