GK
TAXES IN INDIA
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A firm business income is nil /negative. It shall still be allowed as deduction on account of remuneration to working partner to the maximum extent of:
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Nil
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Rs.50,000
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Actual remuneration paid as specified in partnership deed
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None of these
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Explanation:
Detailed explanation-1: -The assessee submitted that remuneration from partnership firm is considered as business income as per sec 28(v) Income Tax Act and he has employed two persons to look after the interest of the firm’s business. Therefore, these expenses are fully allowable from the business income.
Detailed explanation-2: -As per Section 40(b)(iii) of the Act, any payment of remuneration to any Partner is to be authorised by the partnership deed and such payments should not be made from a date prior to the date of partnership deed unless it is authorised by an earlier deed.
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