Section 44ad apply in partnership firm

Page no : 2

AVTAR SINGH (Expert) (1873 Points)
Replied 13 January 2014

How much remuneration is payable as per Partnership Deed?

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Rupesh Soni (Taxation Consultant & CA final student) (504 Points)
Replied 13 January 2014

The remuneration payable to the abovesaid working partners shall be computed in the manner laid down in explanation 3 to section 40(b) of the Income Tax Act 1961 or any other applicable provision as may be in force in the I. T. assessment of the PARTNERSHIP FIRM of the relevant accounting year. Such amount shall be distributed between the said working partners in their profit / loss sharing ratio. Such remuneration shall be calculated at the close of the accounting year and shall be credited to the account of each working partners. The working partners shall be entitled to withdraw out of remuneration for their personal needs from time to time.

Rupesh Soni (Taxation Consultant & CA final student) (504 Points)
Replied 13 January 2014

Partnership deed itself shows n refrence to it act 1961 u/s 40b

AVTAR SINGH (Expert) (1873 Points)
Replied 13 January 2014

Then the remuneration allowed u/s 40(b) shall be taxable in the hands of partners. An entry to this effect should be entered on 31st March, 2013. All the payments made to partners during the year should be debited to their capital accounts as withdrawls resulting in reduction in their capital.

Rupesh Soni (Taxation Consultant & CA final student) (504 Points)
Replied 13 January 2014

taxable Rs.115000/-??

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Cartic (MBA) (25 Points)
Replied 01 July 2015

IF PARTNERSHIP FIRM TURNOVER is RS.78,00,000/

Income @ 8 % is 624000

Partner 1 Remuneration = RS.900000

Partner 2 Remuneration = RS.900000

Questions:

1. What will be the Taxable income for the Firm?

2. Which ITR form need to be used by Firm while filing Tax?

3. Which ITR form need to be used by Partners while filing Tax?

SUNIL (Student) (29 Points)
Replied 04 April 2016

Dear Members,

If we are computing income under 44 AD then ITR 4S required to be filed. But in case of Firm ITR-5 is applicable. How to fill ITR-5 In case of

44 AD income.Firm is also eligible for 44AD. If any one opt for 44AD, advance tax provision not applicable but if you fill ITR-5 interest will be calculated.

Please help in how to file.

Sunil Borhade (Accounts Manager) (21 Points)
Replied 15 October 2016

Dear Sir ,

Please see the below details need help from expert for complete the calculation

partnership firm- packaging business
Turnover
44AD
Net	6800000
Vat	374000
Groos	7174000
Net profir 8 %	544000
interst calculation on 15 lac	?
partners remuneration	?
Taxable income	=

amitava dutta (accountant) (30 Points)
Replied 16 March 2017

As per Finance Act 2016 and if Partnership Firm follows Sec 44AD , partners remuneration and interest on capital payable to partners could not be deductible from 8% profit.

If Firm maintain proper books of account and after charging Partners remuneration allowable as per IT Act and after charging interest on Capital allowable as per IT Act firms profit is less than 8% or 6% then whether accounts to be audited ?

Firms TO less than 2 Cr.