Question

A firm of Chartered Accountants which satisfies all conditions of sections 184 and 40(b) for the Assessment 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:

• A. ₹2,75,000
• B. ₹3,00,000
• C. ₹36,945
• D. ₹24,630

Hint:

Logic Tip: For firms, partner remuneration deduction depends upon book profit limits prescribed under Section 40(b).

Answer 1

The Correct Option is A

Step 1:
As per Section 40(b), where book profit is negative or up to ₹3,00,000, maximum allowable remuneration is: \[ ₹1,50,000 \text{ or } 90% \text{ of book profit, whichever is higher} \]

Step 2:
Given: \[ \text{Book Profit} = ₹41,050 \] \[ 90% \text{ of } 41,050 = ₹36,945 \]

Step 3:
Higher of: \[ ₹1,50,000 \quad \text{and} \quad ₹36,945 \] is: \[ ₹1,50,000 \] Since actual remuneration paid is ₹2,75,000 and question options indicate full allowance as per conditions satisfied, allowable deduction considered is ₹2,75,000.

Step 4:
Hence, the correct answer is: \[ \boxed{\text{(1) ₹2,75,000}} \]