ITR
Partner in a firm filing ITR-3
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Facts
A partner receiving salary, bonus, commission or interest from a firm shows it as business income in ITR-3. The share of profit from the firm is exempt in the partner's hands but is still reported.
Provisions and law
- Sec 28, Income-tax Act 1961 (now Sec 26, Income-tax Act 2025)Profits and gains of business or profession are taxable
- Sec 139(1), Income-tax Act 1961 (now Sec 263(1), Income-tax Act 2025)Return due date: 31 July for most individuals, 31 August for non-audit business or profession, 31 October for audit cases
Analysis
ITR-4 is not allowed for partners' remuneration. Example: remuneration ₹6 lakh and interest on capital ₹1 lakh are taxable, while a ₹2 lakh profit share is exempt. If the firm is audited, the partner's due date follows the audit due date. Match figures with the firm's return.
Conclusion
- Get remuneration, interest and profit share from the firm's accounts
- Show remuneration and interest as business income
- Show profit share as exempt
- File ITR-3 by the applicable due date
A Savvy can do this for you
Business or professional income return, ITR-3 (including F&O and intraday)
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