Answer

1. F

   Facts

   A resident partnership firm, other than an LLP, can use Sec 44AD and file ITR-4 if it meets the limits. Under the presumptive scheme, salary and interest paid to partners are not deducted separately from the presumptive income.

2. P

   Provisions and law

   • Sec 44AD (now Sec 58)Presumptive business income at 6% of digital and 8% of other receipts for eligible businesses
   • Sec 40(b), Income-tax Act 1961Limits on partners' salary and interest in a firm
3. A

   Analysis

   On ₹1,20,00,000 of mostly digital turnover, presumptive income is at least ₹7,20,000, taxed at the firm's flat rate of 30% plus cess. Partners' salary of ₹6,00,000 cannot be deducted from this. If partners' remuneration matters a lot, compare with keeping books and filing ITR-5. An LLP must use ITR-5 and cannot use 44AD.

4. C

   Conclusion

   1. 1Confirm the firm is not an LLP and meets turnover limits
   2. 2Compute presumptive income without deducting partners' salary
   3. 3Compare tax with the books route
   4. 4File ITR-4 for the firm by the due date

The 2025 Act number for Sec 40(b) is not confirmed in our mapping; cite the 1961 section for past years.

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