Income Tax Act, 2025
Section 4: Subs. by Act 32 of 2003, s. 19, for sub-clause (iii) (w.e.f. 12004).
4. Subs. by Act 32 of 2003, s. 19, for sub-clause (iii) (w.e.f. 12004).
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(iv) any payment to a provident or other fund established for the benefit of employees of the
assessee, unless the assessee has made effective arrangements to secure that tax shall be deducted
at source from any payments made from the fund which are chargeable to tax under the head
“Salaries”;
1[(v) any tax actually paid by an employer referred to in clause (10CC) of section 10;]
2[(b) in the case of any firm assessable as such,—
(i) any payment of salary, bonus, commission or remuneration, by whatever name called
(hereinafter referred to as “remuneration”) to any partner who is not a working partner; or
(ii) any payment of remuneration to any partner who is a working partner, or of interest to
any partner, which, in either case, is not authorised by, or is not in accordance with, the terms of
the partnership deed; or
(iii) any payment of remuneration to any partner who is a working partner, or of interest to
any partner, which, in either case, is authorised by, and is in accordance with, the terms of the
partnership deed, but which relates to any period (falling prior to the date of such partnership
deed) for which such payment was not authorised by, or is not in accordance with, any earlier
partnership deed, so, however, that the period of authorisation for such payment by any earlier
partnership deed does not cover any period prior to the date of such earlier partnership deed; or
(iv) any payment of interest to any partner which is authorised by, and is in accordance with,
the terms of the partnership deed and relates to any period falling after the date of such
partnership deed in so far as such amount exceeds the amount calculated at the rate of 3[twelve
per cent.] simple interest per annum; or
(v) any payment of remuneration to any partner who is a working partner, which is authorised
by, and is in accordance with, the terms of the partnership deed and relates to any period falling
after the date of such partnership deed in so far as the amount of such payment to all the partners
during the previous year exceeds the aggregate amount computed as hereunder:—
4[(a) on the first Rs. 3,00,000 of the Rs. 1,50,000 or at the rate of 90 per cent.
book-profit or in case of a loss of the book-profit, whichever is more;
(b) on the balance of the book-profit at the rate of 60 per cent:]
Provided that in relation to any payment under this clause to the partner during the previous
year relevant to the assessment year commencing on the 1st day of April, 1993, the terms of the
partnership deed may, at any time during the said previous year, provide for such payment.
Explanation 1.—Where an individual is a partner in a firm on behalf, or for the benefit, of
any other person (such partner and the other person being hereinafter referred to as “partner in a
representative capacity” and “person so represented”, respectively),—
(i) interest paid by the firm to such individual otherwise than as partner in a
representative capacity, shall not be taken into account for the purposes of this clause;
(w.e.f. 12004).
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any payment to a provident or other fund established for the benefit of employees of the
assessee, unless the assessee has made effective arrangements to secure that tax shall be deducted
at source from any payments made from the fund which are chargeable to tax under the head
“Salaries”;
1[
any tax actually paid by an employer referred to in clause
of section 10;]
2[
in the case of any firm assessable as such,—
any payment of salary, bonus, commission or remuneration, by whatever name called
(hereinafter referred to as “remuneration”) to any partner who is not a working partner; or
any payment of remuneration to any partner who is a working partner, or of interest to
any partner, which, in either case, is not authorised by, or is not in accordance with, the terms of
the partnership deed; or
any payment of remuneration to any partner who is a working partner, or of interest to
any partner, which, in either case, is authorised by, and is in accordance with, the terms of the
partnership deed, but which relates to any period (falling prior to the date of such partnership
deed) for which such payment was not authorised by, or is not in accordance with, any earlier
partnership deed, so, however, that the period of authorisation for such payment by any earlier
partnership deed does not cover any period prior to the date of such earlier partnership deed; or
any payment of interest to any partner which is authorised by, and is in accordance with,
the terms of the partnership deed and relates to any period falling after the date of such
partnership deed in so far as such amount exceeds the amount calculated at the rate of 3[twelve
per cent.] simple interest per annum; or
any payment of remuneration to any partner who is a working partner, which is authorised
by, and is in accordance with, the terms of the partnership deed and relates to any period falling
after the date of such partnership deed in so far as the amount of such payment to all the partners
during the previous year exceeds the aggregate amount computed as hereunder:—
4[
on the first Rs. 3,00,000 of the Rs. 1,50,000 or at the rate of 90 per cent.
book-profit or in case of a loss of the book-profit, whichever is more;
on the balance of the book-profit at the rate of 60 per cent:]
Provided that in relation to any payment under this clause to the partner during the previous
year relevant to the assessment year commencing on the 1st day of April, 1993, the terms of the
partnership deed may, at any time during the said previous year, provide for such payment.
Explanation 1.—Where an individual is a partner in a firm on behalf, or for the benefit, of
any other person (such partner and the other person being hereinafter referred to as “partner in a
representative capacity” and “person so represented”, respectively),—
interest paid by the firm to such individual otherwise than as partner in a
representative capacity, shall not be taken into account for the purposes of this clause;