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Tax on profit received from a partnership firm

SamSue (Partner) (64 Points)

25 September 2024

Hello!

When a partner receives a share of profit in a partnership firm, is the partner required to pay tax on the profit received?

If so, I would appreciate it if you could share the link (URL) to the Income Tax Rule/Clause.

Thanks and Regards,

Sam Sue

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Rama chary Rachakonda (Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294) (4085 Points)
Replied 25 September 2024

Yes, a partner in a partnership firm is required to pay tax on their share of profit received from the firm. According to the Income Tax Act, 1961, partnership firms are taxed as separate entities, and the partners are taxed on their individual shares of profit. Here's the relevant section: "Section 28 - Profits and gains of business or profession (1) The profits and gains of any business or profession carried on by a person shall be chargeable to income-tax." And specifically for partnership firms: "Section 66 - Liability of partners for tax on firm's income (1) The income-tax payable by a firm shall be assessed and paid in the name of the firm. (2) The partners shall be jointly and severally liable for the payment of tax assessed on the firm." You can find more information on the Income Tax Department's website: https://www.incometax.gov.in

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Rama chary Rachakonda (Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294) (4085 Points)
Replied 25 September 2024

I'm assuming you're referring to online courses or educational videos on law. The time it takes for video watching history to update can vary depending on the platform or website you're using. Here are a few possibilities: 1. Immediate update: Some platforms may update your watching history immediately after you finish watching a video. 2. Delayed update: Others might take a few minutes, hours, or even a day to reflect the changes in your watching history. 3. Manual update: In some cases, you might need to manually mark the video as "watched" or update your progress for it to reflect in your history. If you're concerned about your watching history not updating, try the following: - Check the platform's support or FAQ section for information on how watching history is updated. - Ensure you're logged in to your account and have the necessary permissions to access your watching history. - Try refreshing the page or logging out and logging back in to see if that updates your history. If issues persist, consider reaching out to the platform's support team for assistance.

SamSue (Partner) (64 Points)
Replied 25 September 2024

Dear Sir,

Thank you for your response.

Just to clarify further, is the partner liable to pay tax on profit in PAT scenario?

I would appreciate your advice on the PBT and PAT scenarios.

Thanks and Regards,

Sam Sue

Puneet Mittal (Sr. Officer Accounts) (210 Points)
Replied 25 September 2024

Share of profit received from partnership firm is not taxable in the hand of partner becuase firm had already paid tax on above profit (Refer Section 10 (2A) of Income Tax Act.

If partner received salary, Intrest on capital or any other amount from partnership firm that is taxable in the hand of partner.

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