How to calculate taxable Income of Partnership Firm / LLP. Income of partnership firm is taxable @30.90% i.e. Income tax slab rate for partnership firm is 30.90% (30%+3%(cess)).
Steps to Calculate Taxable Income of Partnership Firm or Limited Liability Partnership: – Read Income Tax Slab Rate for 2013-14 and 2014-15
- Find out income under the different heads of income, avoid exempted income under sections 10 to 13A;
- Adjust disallowances and brought forward losses. The total income under the aforesaid heads is gross total income.
- Then from the “gross total income” make deduction under different sections (80G, 80GGA, 80GGC, 80-IA, 80-IB, 80-IC, 80JJA and 80-O.
Taxable Income: Download Income Tax Return for AY 2013-14
- Partner’s share in the total income of the firm shall be exempt from tax [section 10 (2A)]
- Any remuneration by whatever name called which is due to or received by a partner of firm, the firm is taxable in partners hands under the head “Profit and gain of business and profession” it is not taxable under the head “Salaries” (sec 15).
- If a Partner borrows money to make his capital contribution to the firm with money and he is paid interest for this which is taxable under the head “Profit and Gains of Business and Profession”.
- And other is, if any remuneration /interest are not deductible under the section 40(b) it shall not be taxable in the hands of partners.