Provisions of section 40(b)(v) of the Income-tax Act, 1961, regarding admissibility of remuneration of working partner in the assessment of firms - Regarding

Remuneration of working partners: deduction permitted initially for contractual clause but later requires specified amount or quantification method.

The Board permits deduction for working partner remuneration during the transitional period where the partnership deed specifies that remuneration will be the amount allowable under the statute, but disallows deduction where the deed leaves amounts to be agreed at year end without any quantified limit or method; thereafter, deduction is admissible only if the partnership deed specifies individual remuneration or a method for quantification.