Vinod (CA in Practice) (445 Points)
12 April 2012As per Sec. 44AD, a partnership firm is allowed to deduct interest on capital and remuneration to working partners from the presumptive income of 8%.
But in the ITR for 4S, there is no provision to deduct the interest and remuneration - It just asks turnover and calculates 8%.
Please advise me how to adjust the interest and remuneration in form 4S ..
thanks in advance...
kavitha
(studying final)
(830 Points)
Replied 12 April 2012
just deduct the interest n remunaration part from turnover
Vinod
(CA in Practice)
(445 Points)
Replied 12 April 2012
But then i will not get the full benefit as per law.
According to Sec 44AD, "Salary and interest shall be deducted from the income computed under this section", which is 8% of turnover.
For Eg., If the turnover is 30 lakhs,
8% is 2.4 Lakhs
Less Interest (say 12% on 1 Lakh capital) = 12000
Balance is 2,28,000/-
Less: Remuneration - first 3 lakhs - 90% = 2,05,200/-
Total Income is 22,800 only.
Tax on 22,800 = Rs. 7,045/-
How can i know the remuneration without calculating like this.
Also, I am eligible to deduct the interest & remuneration from the 8% income.
Please correct if I am wrong.
kavitha
(studying final)
(830 Points)
Replied 12 April 2012
deduct from turnover interst n rempunaration part then it will show correctly just check out once. it is ryt as par as i know
kavitha
(studying final)
(830 Points)
Replied 12 April 2012
you will provide income computation ryt then what is the issue not showing remuneartion part. just for return purpose show it in that way. i think there is no problem with this
Arun Kumar
(Article Assistant)
(83 Points)
Replied 08 September 2012
Dear Sir,
Partnership firms cannot file ITR-4S as per the rules. A partnership firm has file its return in ITR-5 only. The matter will not change even if it is showing income u/s. 44AD.
Harihar Mandal
(CA)
(504 Points)
Replied 12 September 2012
dear arun kumar a firm can file ITR 4S.
Vinod Ji, after reading the section 44AD I came to the conclusion that you can deduct the salary and interest paid to the partners from presumptive income subject to the condition that after deduction your chargebale profit must not fall below 8%, if it falls then you have to do audit and file ITR 4.
hence you can deduct salary and interest of partner only if your presumptive % is more than 8%
Arun Kumar
(Article Assistant)
(83 Points)
Replied 12 September 2012
Dear Harihar,
as per instructions of ITR-4S, an individual or HUF only can file the return in ITR-4S.
A partnership have to file ITR-5 only. You can show profit u/s. 44AD and also you can diduct interest and remuneration to partners.
In Schedule-BP, point 23 allows any interest and remuneration paid to partners and you can show your presumptive income in 33rd point. Hence you can adjust interest and remuneration to partners.
For your consideration i am attaching the instructions to ITR-4S herewith.
Harihar Mandal
(CA)
(504 Points)
Replied 13 September 2012
sorry I was wrong, I gave my view on the interpretation of sec 44AD and have'nt seen the instruction of ITR 4S
CA Chandra Shekhar
(CA Practice )
(88 Points)
Replied 17 September 2012
Please share from where I can get ICAI Tax Suite Software? My software is corrupted now, and want a fresh copy to download.
Vinod
(CA in Practice)
(445 Points)
Replied 18 September 2012
Thank you very much Arun, Harihar & Kavitha, for sharing your knowledge.. It helped me a lot..
CA Bhagirath Ghare
(CA Practice )
(65 Points)
Replied 18 September 2012
You might be happy to know that Tax Suite Software is Freely available and just a click away. Go to the below link and get your copy immediately.
CA Bhagirath Ghare
(CA Practice )
(65 Points)
Replied 18 September 2012
Mr. Chandra ...Tax Suite Software Freely available, just click on the below link and get your copy immediately.
Link: https://icai.taxsuite.in/subsinfo.htm?mid=00000
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