sec40(b) remuneration to working partner

Its on overall basis i.e. for the whole firm including any no of partners.

Section 40(b) is applicable to limited liabilty partnership also.

Hi Mr. Vinay,,,,  

   Even though there are 2 partners deductions is available as computed with in the least of 1. actual remuneration paid or 2. {higher of 90% on  First Rs. 300000/- net profit or Rs. 150000; plus 60% on balance  irrespective of number of partners.... provided the above computed remuneration will remain deductible whereas excess paid above it will be disallowed....

Regards,

P. Karthika

thaks for the concern karthika ji

but i think the the first limit is not actual remuneration recieved but the maximum remuneration allowed by the partnership deed

can you plese counter check on this

Originally posted by : Vinay Raja
	section 40(b) of income tax provides that the exemption is for first 3,00,000 or loss - 1,50,000 or 90%of BP whichever is higher for the balace - 60%of BP my question is what if there are two working partnes?? will the deduction be available for both i.e., two times or will it bw done on pari passu basis??

 This is max. allowable remuneration to partners. Salary is payable only to working partners. This amount can be shared by the partners equally or as decided by the partners between them.

@ Vinay

The tax law clearly states "Amount of such payment to all the partners during the previous year exceeds the aggregate amount computed"

it means, if there are more than two partners, amount of payment to all those partners combined to be considered. now, question is ratio.. i guess, what R. Suresh Shrinivasan has said is correct: "salary ratio to be considered rather than profit sharing ratio."

Originally posted by : Barun Kumar Ghosh
	Section 40(b) is applicable to limited liabilty partnership also.

barun ji

is it necessary to pay remuneration to partner...Like ABC has two partner A's wife and son..A joined as manager taking salary instead of Remuneration. Is there any issues in this ??

Mr. Parteep in you  case Mr.A doesn't partner of the firm so remunaration liability doesn't arises. And Mr.A joined as employee of the firm so salay payment arises.

OM SAI SRI SAI JAI JAI SAI

Dear All

Mr.Prateek's question is if  any salary paid(by the partnership firm)  to Mr.A who is a manager of a firm,  in which partnership firm, his (mr.A's) son and spouse are partners-any restrictive provisions are applicable to the payment of the salary to Mr.A, by the firm?

Yes. Mr.Prateek the provisions of Section 40A(2)(b) will come to operation.

Best Wishes

Sathikonda