Partner Remuneration Limit Calculator
The maximum working-partner remuneration a firm can deduct under Section 40(b), and how much of what was paid is disallowed.
After interest to partners within 12%. Enter a loss with a minus sign.
Section 40(b) limit
Indicative only. Section 40(b)(v) limits from AY 2025-26. Remuneration must be authorised by the partnership deed and paid to working partners. Interest to partners is limited separately to 12% p.a.
How it works
Book profit
Net profit plus the remuneration already debited, after allowable interest to partners.
Two slabs
First ₹6 lakh: higher of ₹3 lakh or 90%. Balance: 60%.
Disallowance
Anything paid above the limit is added back to the firm's income.
Set partner remuneration at the deductible ceiling
The 40(b) limit is a function of book profit, so it is only known once the accounts are drawn up, and firms routinely either leave deduction on the table or overshoot and face a disallowance. Enter the net profit and the remuneration debited; the calculator rebuilds book profit, applies the two slabs and shows exactly how much is deductible and how much is not.
Revised limits
₹3 lakh / 90% on the first ₹6 lakh, 60% thereafter, from AY 2025-26.
Loss years
Even in a loss, ₹3 lakh of remuneration is deductible if the deed authorises it.
Deed matters
Unquantified or retrospective remuneration clauses fail regardless of the arithmetic.
194T TDS
From April 2025, 10% TDS on partner payments above ₹20,000 a year.
Frequently Asked Questions
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