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Remuneration Received From Firm Is Taxable For A Partner

Monday, November 12, 2012

 I am a partner in a Registered Partnership Firm. The Firm has not paid me any remuneration. However, I have received Interest on capital and my share of profit from the Firm. Please advice the amounts which are taxable.
—Suraj Tandel, Jogeshwari

If you are a partner in a Registered Partnership Firm, then the remuneration received from the firm is taxable. Also the interest on capital received by you from the firm is taxable. However, share of profit from firm is not taxable since the firm would have paid the tax on the profit of the firm. Hence, in your case only interest is taxable since you have not received any remuneration.

I have borrowed some money from a bank against my residential flat. My friend had provided a personal guarantee for the said loan. I have been in financial hardships for quite some time and hence I am not able to pay the bank. The bank has approached my friend who is the guarantor for repayment. He has agreed to settle the loan provided he is given the property documents as security. Please advice?
—Anand Patel, Malad

In your case the papers related to your property are changing hands. There is no sale or transfer of the property per se by exchanging the documents. Hence, the question of any capital gains does not arise.

I have sold some assets in India and have earned capital gain on sale of these assets. I propose to settle overseas and invest the sale proceed for acquiring a house property overseas. Please advice.
—Samarjit Chedda, Cotton Green

The Income Tax Act, 1961 is silent about acquiring a new residential house property exclusively in India. Hence, as per law the benefit would be available for overseas acquisition of residential property. However, the assessing officer normally does not allow the exemption during the assessment and the assessee has to prefer litigation. My advice is that one has a bright chance of winning in litigation.

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