Presumptive income schemes of 44AD , 44ADA and 44AE are also applicable to partnership business

However, if these schemes claimed, then we cannot claimed deductions for partners salary and interest

 

Q1  
Suppose a Partnership firm has turnover of 80 lacs ( 20 lacs cash rest in bank)
What is its business Income
How much Income tax he is payable by it?

Answer

Particulars CASH BANK TOTAL
TURNOVER 2000000 6000000 8000000
PROFIT % 8% 6%  
PROFIT 160000 360000 520000

 

   
PROFIT  520000
TAX 156000
SURCHARGE 0
TAX+SURCHARGE 156000
CESS 4% 6240
TOTAL TAX+CESS 162240

 

Q2

Can it pay Interest and Salary to Partners to reduce its tax liability?

Answer

Yes in f.Y 2015-16
If we are claiming 8%,6% profit ,we cannot claim deductions for different expenses under Section 30 to 38.
But we  can claim other deduction like Section 40 (b) Deduction for partners.

 

No from F.Y 2016-17 onwards till date
If we are claiming 8%,6% profit ,we cannot claim deductions under Section 30 to 38.
and we also cannot claim other deduction like Section 40 (b) Deduction for partners.

 

 

  1. Income Tax
  2. PGBP Income

About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 10 years. He also provides Accounts Tax GST Training in Delhi and Pune.