For calculation of partners remuneration partnership need to calculate Book form of firm. As a firm partner you must be having question on What is books profit ? How to calculate book profit ? What is relevance of book profit for income tax calculation. Book profit is amount calculated as per Income Tax Act to arrive at amount of maximum allowable deduction of remuneration of partner. In this article we discussion about steps to calculate book profit of Partnership firm to calculate partners remuneration.
Book profit calculation is simply profit amount before debiting remuneration amount of partner. For Income tax partner remuneration calculation purpose book profit and actual firm profit is different.
| S.No. | Particulars | Amount |
| 1 | Profit as per Profit & Loss a/c | XXX |
| 2 | Add :Remuneration to partners if debited to Profit and loss a/c | XXX |
| 3 | Add : Salary to partners if debited to Profit and loss a/c | XXX |
| 4 | Add : Bonus to partners if debited to Profit and loss a/c | XXX |
| 5 | Add : Commission to partners if debited to Profit and loss a/c | XXX |
| 6 | Add : Brought forward business loss, deduction under section 80C to 80U if debited to profit and loss a/c |
XXX |
| 7 | Less : Income under capital gain, other sources ,house property, if credited to profit and loss a/c | XXX |
| S.No. | Particulars | Amount |
| 1 | Profit as per Profit & Loss a/c of firm | 7,00,000 |
| 2 | Add :Remuneration to partners if debited to Profit and loss a/c | 2,00,000 |
| 3 | Add : Salary to partners if debited to Profit and loss a/c | 0 |
| 3 | Add : Bonus to partners if debited to Profit and loss a/c | 0 |
| 4 | Add : Commission to partners if debited to Profit and loss a/c | 0 |
| 3 | Add : Brought forward business loss, deduction under section 80C to 80U if debited to profit and loss a/c |
0 |
| 4 | Less : Income under capital gain, other sources ,house property, if credited to profit and loss a/c | 0 |
| Book Profit (Rs) | Maximum Deductible Amount (Rs) |
| Loss | 150,000 |
| Up to 3 Lakh | 90% of Book Profit or Rs 150,000; whichever is more |
| More than 3 Lakh | 60% of Book Profit |
1 Comment
If we have b/f business loss A. Y 21-22and b/d unabsorbed depreciation for A. Y 18-19,21-22, what is it’s treatment in calculation of partners remuneration