CMA Intermediate · Direct and Indirect Taxation · Salaries
Mr. Harish Patel is a partner in Patel & Sons, a partnership firm. The firm paid him Rs. 5,00,000 as salary and Rs. 1,00,000 as commission during the tax year. How should these amounts be treated under the head Salaries?
Remuneration of any kind received by a partner from the firm, whether called salary, bonus or commission, is not regarded as salary. So none of the Rs. 6,00,000 received by Mr. Patel is chargeable under the head Salaries.
- ARs. 6,00,000 is taxable as Salaries
- BRs. 5,00,000 is taxable as Salaries and Rs. 1,00,000 as other sources
- CRs. 1,00,000 is taxable as Salaries and Rs. 5,00,000 is exempt
- DNeither amount is chargeable under SalariesCorrect
Explanation
Section 15(4) provides that any salary, bonus, commission or remuneration due to or received by a partner from the firm is not salary for section 15. So both Rs. 5,00,000 and Rs. 1,00,000 are outside the head Salaries. Treating the amount as salary because it is called salary ignores the partner exclusion.
Did you get it right without looking?
One question tells you little. A timed set on Salaries shows your real accuracy, how long you take and where you lose marks.
More Salaries questions
- Under section 392 of the Income-tax Act, 2025, at what rate must the person responsible for paying salary deduct tax at source, and when?
- Sunita, assessed under the new regime, is due salary of Rs 6,00,000 for the tax year. In the same tax year her employer also pays her Rs 40,…
- Ravi Mehta, an employee of a private company, is given an interest-free loan of ₹6,00,000 on 1 April 2026 and repays nothing until the end o…
- Ms. Deepa Nair received Rs. 60,000 in the current tax year as salary for the next tax year, paid in advance by her employer. In the next tax…
- Mr. Sanjay Gupta has the following for a tax year: salary income Rs. 7,00,000, and a loss of Rs. 3,00,000 under the head Profits and gains o…
- Meera, a salaried employee of a private company, receives dearness allowance every month along with her basic salary. Which statement about …