Here the details of one of my client.... YuvCC, a partnership firm consists of two partners and ha…
Here the details of one of my client....
YuvCC, a partnership firm consists of two partners and have a net profit of Rs 900000 before deduction of the following items:
(1) Salary of Rs 30,000 each per month payable to two working partners of the firm (as authorized by the deed of partnership).
(2) Depreciation on plant and machinery under section 32 (computed) Rs 1,80,000.
(3) Interest on capital at 15% per annum (as per the deed of partnership). The amount of capital eligible for interest Rs 6,00,000.
I need to know the book profit and salary eligible as per Income Tax Law....
Net Profit Rs 900000
Less: Depreciation Rs 180000
Less: Int on capital @ 12% of 600000= Rs 72000
Book Profit for computation of salary= Rs 648000
Salary Limit:
First 300000 of book profit= Rs 270000
Balance 348000; 60% of book profit= 208800
Total eligibilty of salary= 478800 or
Amount of salary debited= 720000, whichever is less
Amount of deduction of remuneration allowed= Rs 478800
Therefore Net Profit= Rs 169200
