Question
A firm of Chartered Accountants which satisfies all conditions of sections 184 and 40(b) for the Assessement year 2025-26, has paid remuneration to partners amounting to ₹ 2,75,000. The book profit of the firm is ₹ 41,050. The firm can claim deduction for remuneration paid to partners of :
This question was previously asked in
CUET PG 2026 Agri-Business Management Question Paper (25-Mar-2026) (Shift 2)
The correct answer is
₹ 2,75,000
Partner Remuneration Deduction Limits
Deduction for partner remuneration is allowable for firms that satisfy the conditions under Section 184 and Section 40(b) of the Income Tax Act, 1961. This deduction is subject to specific limits.
The amount allowable as a deduction is the lower of:
- The actual remuneration paid to partners.
- The statutory limit calculated based on the firm's book profit.
Statutory Limit Calculation
The statutory limit is calculated based on the firm's book profit. According to the rationalised scale, the limit is 90% of the book profit if the book profit is up to ₹ 3,00,000.
Given:
- Book Profit = ₹ 41,050
Calculation of the statutory limit:
Limit = $0.90 \times \text{Book Profit}$
Limit = $0.90 \times ₹ 41,050$
Limit = $₹ 36,945$
Claimable Deduction
The firm can claim deduction for remuneration paid to its partners amounting to ₹ 2,75,000.
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