I am a working partner in a partnership firm.We are 3 partners. We get Rs..75000 for salary(225000).Profit of partnership firm after remuneration is 15000.. I am also doing business and turnover is less than 1Cr. Am availing benefit of section 44AD (Profit =Rs550000)
My question is:
Maximum salary allowed as per income tax provision?
Which ITR to be filed for Partner(Me)?
How much Amount is Taxable in the hands of Partners & Firm as well.
Profit Distributed in partner will be 15000-Tax or 15000?
Provision for tax is necessary or not in case of partnership firm.
Asked 3 years ago in Income Tax from Jind, Haryana
ITR 4 may be used for filing return of Income. Maximum remuneration being aggregate of remuneration to all the partners together in a financial year is 90% of book profit upto Rs 3,00,000 and beyond Rs 3,00,000 60% if the balance book profit.
Remuneration if deducted from profit then profit is taxable in the hands of firm and remuneration and interest on capital to partners is taxable in the hands of partner. nothing is taxable in both hands.
Provision for taxation is based on accounting policy of the firm.
As per partnership Act, maximum remuneration is for first 300000 90% and for remaining 60%.
ITR form for partners is ITR 3
Remuneration and interest on capital is taxable in the hands of partner, Share of Profit is exempted.
Profit of 15000 is taxable in the hands of partnership firm and the same is exempted in the hands of Partners.