what is the maximum % of net profit which can be distributed ?????????????????

Question

what is the maximum % of net profit which can be distributed as remunaration to the partners.?????

Please give the answer with the section or rule specific.

What are the advantages and dis advantages of dowing so.

Answer 1

Remunaration to partnership is based on the partnership deed, and exemption of Income Tax is available only if he is working partner.

Point to be noted here is any remunaration allowed as remunaration in the hands of firm is taxable in the hands of partner and anything which is disalloed in the firm is exempt in the hands of partner.

Answer 2

100% In a partnership, the partners are TAXED on the net profit including any distributions even if no distributions on made.