9911796707
TMI BlogSection 40(b) - Payment of interest, salary etc. made by firm to its partnersX X X X Extracts X X X X X X X X Extracts X X X X ..... aid to partners by a firm are deductible if all the following conditions are satisfied: i. Payment of salary, bonus, commission or remuneration, by whatever named called is to a working partner. If it is paid to a non-working partner, the same shall be disallowed. ii. The remuneration shall be admissible only if the partnership deed either specifies the amount of remuneration payable to each i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on their fixed capital account, current capital account and loan account is allowable as deduction to the firm provided the partnership deed specifically authorizes the payment of interest on fixed capital account, current capital account and loan account. If the partnership deed authorizes the payment of interest on fixed capital account then interest on current capital account and loan account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the book profit, whichever is more. On the balance of book profits At the rate of 60% Following adjustment should be made to the Net Profit under PGBP for computation of Books Profits: * Only the income u/h PGBP is to be taken * Current year and brought forward depreciation is to be deducted. (Section 32) * Brought forward losses will not be deducted. (Section 72) * Chapter VI-A ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Remuneration should not be retrospective. Interest should not be retrospective. When Recipient of Interest Acts in a Representative Capacity * Explanation 1 to Section 40(b) * Where an individual is a partner in a firm in a representative capacity, then interest paid by the firm to him in individual capacity, shall not be taken into account for the purposes of Section 40(b) and if the intere ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
