What is the tax treatment of income from a partnership firm?

Income from a partnership firm is first computed at the firm level as per provisions of Section 28. The firm’s profits are then exempt in the firm’s hands under Section 10(2A) but taxable in the hands of partners as per their profit sharing ratio under Section 28(v). Partners can claim deduction for interest, remuneration etc. paid to them by the firm under Section 28(va).

Supporting Case Law:
– ACIT vs Ramniklal M. Shah (2018 ITA 1121/2017) – Guj High Court – 2018 – https://goo.gl/j1PnZv
– Ratio: This case dealt with the issue of under-reported or excessive remuneration by partners.