Whether for assessment years subsequent to assessment year 1996-97, no deduction under section 40(b)(v) will be admissible unless partnership deed either specifies amount of remuneration payable to each individual working partner or lays down manner of quantifying such remuneration
Circular : No. 739, dated 25-3-1996.
1. The Board have received representations seeking clarification regarding disallowance of remuneration paid to the working partners as provided under section 40(b)( v) of the Income-tax Act. In particular, the representations have referred to two types of clauses which are generally incorporated in the partnership deeds. These are :