Which statements are correct about the provisions of the Income-tax Act, 2025 governing deductions for…
Authorisation by the partnership deed and the stated current remuneration ceilings are correct. Remuneration to non-working partners is not deductible, and the maximum…
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Which statements are correct about the provisions of the Income-tax Act, 2025 governing deductions for remuneration and interest paid to partners?
i. Remuneration is allowed to working and non-working partners.
ii. It must be authorised by the partnership deed.
iii. Maximum remuneration limit:
a. In case of loss, Rs.3,00,000.
b. On the first Rs.6,00,000 of book profit, Rs.3,00,000 or 90% of book profit, whichever is higher; on the balance of book profit, 60%.
iv. Maximum rate of interest is 15%.
Answer and explanation
Correct answer A
Authorisation by the partnership deed and the stated current remuneration ceilings are correct. Remuneration to non-working partners is not deductible, and the maximum deductible interest rate for partners is 12%, rather than 15%.
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Tamil Nadu SET (TNSET)