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Remuneration to partners - presumptive option available?

Richa vaidya (Partner) (56 Points)

21 September 2018

Hi Sir,

For a partner of partnership firm, has only income from firm taken as salary as per partnership deed (50%).

It is in nature as salary however I understand as per Sec 15, it is not to be taken as income from salary head but income from “Profit or Gains of business or Profession”

In this head, under what row to fill the income? - "Sale of goods" is correct?

Firm is involved in electronics redistributors.

Partner does not have any expense, or book of accounts. Can partner file inder 44 AD section? Total income as Remuneration is Rs 8 L

Thank you.

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3 Replies

Vikas Gupta (9 Points)
Replied 21 September 2018

Partners remuneration is not under salary. Check with experts, if it can be filled under 44 AD or 44 ADA in hands of partner.

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Richa vaidya (Partner) (56 Points)
Replied 21 September 2018

Thank You,

I want to know if Partner can go for presumptive filing of ITR...by declaring "Gross Receipts" = 8 Lakhs

Or some other way to file?

prahlad swarup (Legal) (16 Points)
Replied 21 September 2018

Yes you can file with 44ad upto 2 cr and 44ada upto 50 lakh if professional firm

44ad is: Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an eligible assessee engaged in an eligible business, a sum equal to eight per cent of the total turnover or gross receipts of the assessee in the previous year on account of such business or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the eligible assessee, shall be deemed to be the profits and gains of such business chargeable to tax under the head "Profits and gains of business or profession

So it is over riding any other provision wrt the limits for eligible business.

Salary to partner is treated as exense in firm's P/L statement. It is taxed at hands of partner. Hence you can claim advantage of this provision of 44ad and reduce liability of the firm as much as the limit provided in 40(b)(v)