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EXPENSES CLAIMED AGAINST REMUNERATION INCOME

Question BankCategory: Income TaxEXPENSES CLAIMED AGAINST REMUNERATION INCOME
kollipara sundaraiah asked 1 year ago

SIR,
It person remuneration and interest income only from partnership firm. but assessee car expenses, salary paid to accountant, car depreciation,telephone expenses some expenses paid
Query:
Assessee above mentioned expenses claimed accepted against income remuneration, interest in it act.

1 Answers
Rachna answered 1 year ago

Expenses which are allowed as deduction to firm for remuneration, bonus , commission, interest etc. are taxable in the hands of partner as his business income..
If such remuneration is not allowed as expense in hands of partnership firm then it will not be taxable in the hands of partners.
Further any expenses which is directly done for earning that income is allowed as deduction under PGBP like depreciation for car exclusively used for business but in individual name of partner. But only proportionate part of such expenses can be claimed.That part which is proportionately for profit share of firm is not allowed as deduction because profit share of firm is exempt in hands of partners.
 Any other expenditure to be claimed, namely travelling, conveyance, books, printing and stationery, etc, will need to be proportionately apportioned between the exempt profit share and taxable remuneration.

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