Question ID :
44414
TREATMENT OF PARTNERS CURRENT ACCOUNT
One of our client who is a partnership Firm has filed its return of income u/s.44AD admitting 8% income on gross turnover. The partners have shared the gross receipts amount received in banks in their proportionate ratios.
Since the return is filed/s.44AD the share of profit from firm in partners books is less than what has been transferred from bank.
For Eg; Gross receipts Rs.1000000/-(Rs.5 lacs each transferred to 2 partners)
Share of profit is Rs.40000/- each only (8% of Rs.1000000/- offered u/s.44AD)
What is the treatment of the amount showing as excess credit in the books of the partners
Posted by
Parvathi
on
Jan 20, 2023
Filed Under
MISC.
Answer ID :
83890
U have to pass the actual figures not notional. Presumptive taxation is just an option in Income Tax to declare minimum 8 percent profit.
Posted by
VINAY BHARGAV KUMAR G on
Jan 21, 2023
Answer ID :
83892
No need to pass any entry for excess credit. These are merely for Income-tax filing purposes. Only actual entry with actual tax amount if any will get through the books
Posted by
SURAJ KUMAR CHOUDHARY on
Jan 23, 2023