Tds query

TDS 1100 views 2 replies

Venu

36 Points Joined June 2011

Hi Everyone,

I am a partner of a Partnership firm along with my wife as other partner. I am the working partner and sole authorization for all activities of the firm. My wife is sleeping partner. The firm runs on Recruitment services to a USA based company and we get paid in USD dollors for the work we do.

We started in June 2011 and till now Firm earned $15000 i.e., INR 6,75,000 till now. As a working partner we put 90% of book profits as remuneration to me which is mentioned in Deed.

I request you to suggest anyone how to calculate the Taxes, Remuneration(only one working partner), Profit/Loss sharing is 50:50.

And Suggest me to minimize the tax on Firm Profits as well as My remuneration.

Thanks

Venu

Hyderabad

Replies (2)

deepak

Chartered Accountant Company Secretary

94 Points Joined August 2008

Limits for partner salary for Assessment year 2010-11 onwards is given below

Common rate for both type of Firm whether covered under 44AA or not

- On the First three lakh of the Profit or In case of Loss: 150000 or 90 % of profit which ever is more.
- On balance profit:60% of the profit

Only this much will be allowed as deduction from the firms income in firms return , and this amount then taxable under partner's individual capacity.

By the wt kind of recruitment services you provide ??
Asking because I am an Holder of H1b visa and I am looking for some good oppertunities , Hope you can help a bit .

YOGESH

STUDENT

128 Points Joined August 2008

Above rates for Remuneration by Mr Deepak is correct.

Apart form the remuneration the partners can also share Interest of not more than 12% as per IT act on the Capital, the profit from the Firm is Taxable @ 30% and 3% of Secondary & Higher Education Cess.