A firm pays salary and interest on capital to its resident partners. The salary and interest paid fall within the limits specified in section 40(b). Which of the following statements is true?
A. The firm cannot claim these as expenditure
B. These are exempt in hand of part-ners
C. These are taxable in hands of part-ners
D. No treatment
Answer:C
A firm pays salary and interest on capital to its resident partners. The salary and interest paid fall within the limits specified in section 40(b). Which of the following statements is true?
A. The firm cannot claim these as expenditure B. These are exempt in hand of part-ners C. These are taxable in hands of part-ners D. No treatment