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Very urgent query

17 September 2011

1 Dr. Ashok and Dr. Pramod are partners in a clinic which is assessed as Firm as such Both contribute Rs. 3,00,000 each and sharing profit and loss equally They are expecting a net profit ( before considering interest and remuneration ), as Rs. 6,00,000 for the previous year 2006-07. If the interest is allowed @ 10% pa, the maximum remuneration that can be paid is_____________.

2. Mr Salman khan aged 39 yr has completed 10 ye of service in ABC Ltd He recd compensation of Rs. 5L at the time of VRS. How much of the amount will be khan's hand

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5 Replies

Mohammad Afroz Ahmed (Article student) (51 Points)
Replied 17 September 2011

1.
First Calculate Book Profits as follows:

    Net Profit                                                  xxx
Add:
    a)Salary already paid                            xxx
    b)Expenses disallowed
      but debited to P&L                               xxx
    c)Depreciation already debited
      in P & L                                                  xxx
Less:
    a)Expenses Allowed but not
      debited to P & L                                   xxx
    b)Incomes credited but
          considered under other
      heads of income                                xxx
    c)Depreciation as per IT                     xxx

Book Profit                                                  xxx

Then Calculate Partner's remuneration as follows:

For AY 2007-08

in case of a firm carrying on a profession referred to in section 44AA (Medical,Legal,Engineering etc.)or which is notified for the purpose of that section—

(a)on the first Rs. 1,00,000 of the book-profit or in case of a loss
Rs. 50,000 or at the rate of 90 per cent of the book-profit, whichever is more;

(b)on the next Rs. 1,00,000 of the book-profit
at the rate of 60 per cent;

(c)on the balance of the book-profit
at the rate of 40 per cent;

Eligible Remuneration is    (i) Sum 0f a,b,c above or                                                                                          (ii) Remuneration actully paid in the year
                                              Whichever is higher.

Pls Note:
1. Payment of Remuneration and interest is to be authorised by partnership deed.
2. Remuneration is to be paid only to working partner.
3. Interest paid in excess of 12% is disallowed.
4. Interest and Remuneration is paid for the period prior to making amendmends in partnership deed regarding interest and remuneration is ineligible.

2) As per section 10 (10c) (viii) any amount recieved as VRS from CG or CG notified institutions are not included in the total income of the assessee if such amount does not exceeds Rs. 5 Lakhs.
   Thus Rs. 5 Lakhs is exempted in Mr. Khan's Hands.

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Himanshu (student) (22 Points)
Replied 13 October 2011

There are different slabs for Man,Women and aged person for tax like for man 1,60,000 for women 1,90,000 and for aged person 2,40,000. Now, Mr.x who was a earn a crores of rupees from his business now he was given his all property or everything which values are in crores of rupees to Mr.y who was a related of Mr.x.Mr.y was not a man or women then which slabs are apply here and what is tax liability for his/her?