RE:Tax free income
by Sujit Shetty on Apr 02, 2008 02:17 PM
Partners can take salary upto a limit prescribed u/s 40 b of the IT Act, provided the same is provided in the partnership deed. This limit is dependent upon the assessable profit of the firm. The partners remuneration upto this limit is exempt from tax in the hands of the individual partner. But the remuneration in excess of this limit will be taxed as his business income. The partners salary upto the above limit u/s 40 b can shown as an expense in the firms book.
RE:Tax free income
by ! on Apr 02, 2008 01:36 PM
hi...they can show like that...no problem in that....but when u see him as an individual, he will be paying taxes for personal income !!! so he will not pay tax as an partner...but will pay as an separate individual....hope i am rite.....correct me if i am wrong !!!
RE:Tax free income
by Vishal on Apr 02, 2008 02:12 PM
If partner can take salary from firm he should take only that much salary which is tax exempted and has to pay zero tax on salary. By doing this the profit of firm comes down and so the firms tax liability.
