The turnover of a PARTNERSHIP firm is9.00 Lacs and the net profit is Rs.72,000 i.e. 8%. If partners salary(64800) and interest on capital (6000) be allowed as deduction then Net profit comes to 1200 is this correct for filing the return U/s 44AD without tax audit?
Yes, it is correct.
OM SAI SRI SAI JAI JAI SAI
Your calculations are correct. Go ahead and file the Income Tax Return.
Regards,
Devendra k
absolutely correct!!! move on for filing return.....
2) Any deduction allowable under the provisions of sections 30 to 38 shall, for the purposes of sub-section (1), be deemed to have been already given full effect to and no further deduction under those sections shall be allowed :
Provided that where the assessee is a firm, the salary and interest paid to its partners shall be deducted from the income computed under sub-section (1) subject to the conditions and limits specified in clause (b) of section 40.
so u are correct.......
YES YOU ARE CORRECT IF
THE INTEREST ON CAPITAL IS NOT MORE THAN 12%
Thanks for replies
Interest on cap is 12% only. What about Partners Salary i have calculated @ 90% of 72000 is this correct?
Dear Obeid,
Salary is to be computed on Book profit. Which is nothing but Net profit (after deducting allowable interest on capital(12%) but before deduction of salary). 72000(-)6000=66000. Rs. 66000 will be book profit. Now calculate allowable salary as per section 40(b).
Hope, this solves your query.
Dear Obeid,
Your calculation is wrong as per section 40b
BOOK PROFIT 72000
- INT to partners 6000
BP for remuneration 66000
- 90 % Rem (40b) 59400
Taxable profit 6600.
CAclubindia
