The point of interest is clear. Now let's talk about the
second payment.
The maximum interest is 12% and above that is disallowed.
How much is allowed? Maximum 12%.
Now the second payment.
The second payment could be that you have given them a
salary payment, a bonus or a commission payment to the
partners.
The interest has been paid, the money that they have
invested, the account that my partners have invested, on
that the government has said that we will allow you only up
to 12%.
Whatever you give on that, that is your faith, you give it.
It is your faith that you have given, but we are allowing
only up to 12%.
Now come to the second point. Salary.
Because what did I tell you about Rancho?
Rancho was a very intelligent person.
He said that if God closes one door for me, then somewhere
else he opens the other door.
If God closes the door of interest up to 12%, then the door
of salary is still open.
I will show so much salary that all my profit will be zero.
Have you seen this person's brain?
How fast his brain works.
If the window of interest is closed, then the door of
salary is open.
If there is a profit of 100 crores, then I will show the
salary of 100 crores.
I will do it. Profit will be zero.
I will save the entire income tax on 100 crores.
The government said that Rancho was a fool.
Son, come here.
What do you think?
Is there something written on my forehead?
Is there something written here?
Brother, it is like this.
We have also set a limit for this.
How many expenses will you show?
We have set a limit on every expense.
Sir, is there any limit on salary?
Can't I get more salary than this?
Sir, there is a limit.
And understand the objective of setting a limit.
If I don't set a limit, then I will give the same amount of
salary as the profit.
Profit will be zero.
What happens in this case, sir?
Come here.
There are some conditions in this case.
In this case, let's discuss some conditions.
First of all, in our case, Farhan was a non-working partner.
And who were Raju and Rancho?
They were our working partners.
Who should get salary according to the rules?
Forget about the income tax.
Tell me according to the rules.
The person should get salary according to the rules who is
working hard.
So, who should get salary?
Raju and Rancho.
So, the first condition is salary.
The second condition is who will you give salary to?
Working partner.
If you give salary to non-working partner, then add it back
in the profit and loss account.
You won't get the expense.
What will you get?
Working partner.
And how much will you get?
We have put a limit.
We are not giving anything to non-working partner.
If you have put the expense of non-working partner in your
profit and loss account, then add it back.
We are not giving it.
We don't even like to see his face.
Sir, what is the matter with you today?
Today, I have
drank Red Bull.
Do you feel any energy?
As they say, Red Bull gives you wings.
Anyway, we were saying that if you have put salary of
non-working partner in your profit and loss account, then
you won't get the expense.
Forget it.
If you have put it, add it back in the profit.
You have to discuss about working partner.
Working partner has also put a limit.
What has he put?
He has also put a limit.
Sir, why have you left the first point?
Why have you left the first point?
Working partner is written in the second point.
Why have you left the first point?
Sir, tell me one thing.
First of all, if I make a payment in anything, before
making the payment, what I have to see is whether that
person has the right to take that payment or not.
Think again and tell me.
I have the right in the partnership firm.
From where?
Where do I get that right in the partnership firm?
Tell me.
I get that right in the partnership firm from the
partnership deed.
I should have this deed.
It should be written in this deed that I will give this
salary to this person, this partner.
If you do not have this deed, then you will not get any
deduction.
You should have this partnership deed.
Is it authorized in the deed?
Is it written in the deed that the partner will get the
salary?
Yes, it is written.
Okay, sir.
Now, let's come to the salary point.
Is it non-working?
Remove it.
If it is a working partner, see the limit on this.
Now, let's discuss what the limit is.
If the salary of the working partner is up to this limit,
then we will give.
See what the limit is.
The limit is, my dear, book profit.
If, we have to see the book profit, there is either a loss
in the book profit or up to 3 lakhs.
Okay.
So, this is 90 percent or 1.5 lakhs, whichever is,
whichever is higher.
And next, what will be left over the next 3 lakhs? 60
percent.
Director sir, give it a full screen.
Keep it all at the back.
Okay.
See it once.
Okay.
Okay, sir.
Sir, about book profit,
I am telling you, don't ask any doubt.
Brother, everything is here.
I will tell you everything, my dear.
I will not leave anything.
I am not going to leave anyone.
First, understand what the limit is.
The limit says that your book profit, if that book profit,
if that book profit is up to 3 lakhs, or your book profit
is showing you a loss, then in that case, what will be your
limit? 90 percent of the book profit or 1.5 lakhs,
whichever is higher.
And if, for example, if there is a book profit of 10 lakhs,
this will be the limit up to 3 lakhs.
And what will be the limit above 7 lakhs? 60 percent.
Note this down once or click a picture of this.
Because I have to ask you a few questions now.
Okay? Did you understand?
Now, let's see a simple question.
For example, 10 lakh rupees.
10 lakh rupees.
My book profit, for example, see this.
My book profit, for example, is of 10 lakhs.
Okay? Divide this by 2.
One is up to 3 lakhs.
And the other is the balance.
How much is the balance? 7 lakhs.
Is there any problem so far?
One 3 lakhs, one 7 lakhs.
Let's go.
What did I tell you about 3 lakhs?
Either 90 percent or 1.5 lakhs, whichever is higher.
Whichever is higher.
How much will 90 percent be? 2.7 lakhs.
Or 1.5 lakhs.
Which is higher between the two? 2.7 lakhs.
Okay, keep this here.
Come to the next one.
What did I tell you about the balance? 60 percent.
How much is 60 percent of this? 4.2 lakhs.
Take this.
Take the total of these two.
2.7 lakhs and 4.2 lakhs.
How much comes out? 6,90,000.
Total.
This is a limit.
Maximum firm has this limit.
Up to 6,90,000.
If you are giving a remuneration.
Up to 6,90,000.
If you are giving a remuneration.
Then allowed.
As soon as you go above 6,90,000.
Then above 6,90,000 disallowed.
For example.
Try to understand.
If it was 8,00,000.
I would have given a remuneration of 8,00,000.
I would have shown 8,00,000 in P&L.
I have shown 8,00,000 in P&L.
How much is allowed? 6,90,000.
So 8,00,000 minus 6,90,000.
1,10,000.
Add that back.
Your profit, my dear, will increase.
The window of interest is 12 percent.
The other window was to show the salary and reduce the
profit.
The government has also said that if you have a book profit
of up to 3 lakhs, then that book profit will be either 90%
or 1.5 lakhs, whichever is higher.
And the balance that is left, that will be 60%.
If you look at the total, this much will be allowed to the
firm.
What will be above that, will be disallowed.
The excess will be added back to the profit.
Sir, Ranchod Das Chanchad was such an intelligent and
genius person in the 3 Idiots movie.
He had a very sharp scientific intellect.
We agree with that.
He used to make patents.
We also accept that.
But sir, when it comes to finance,
Ranchod Das Chanchad kneeled down and said, this
partnership firm in India, to ruin the Income Tax Act, to
oil my partner,
I am leaving all this and going back to Jammu and Kashmir,
where he used to live, Leh, Ladakh.
I will go there and ride my scooter.
I will go there and invent something.
Brother, we don't understand anything.
And with that, this partnership firm will be closed.
This partnership firm will be dissolved.
Sir, what is book profit?
We were talking about net profit.
What is book profit?
Sir, book profit is nothing.
It is nothing.
When I have come, there is nothing.
It is confidence, sir.
I will get it done.
That is why I say, always have confidence.
Always keep it.
Where is the butter?
What is book profit?
You have a simple thing.
What is net profit?
Is this net profit?
Yes, it is.
First, add back from this.
If while calculating net profit, you are minusing the
expenses, remuneration, salary, bonus, commission, whatever
salary you have given to your partner, add it back.
And minus your unabsorbed depreciation.
This figure will come out.
What is it called?
This is called book profit.
Sir, what all work do we have left?
Your work is, for example, you go to a partnership firm and
do a job.
Or your client, you do tax work.
And your client, the partnership firm person comes.
First, according to accounting, that person must have
deposited his expenses for all working partners and
non-working partners as well.
What will be your work?
To take care of non-working partners.
Leave that non-working partner.
Remove that expense from P&L and add it back.
Whatever is the expense of a working partner, whatever is
the expense of a working partner, check its limit. Because
if it is a working partner, then its limit will come here.
Check the limit.
If it is within the limit, then allow.
If it is not within the limit, then the more it is, the
more disallow.
Do you have to calculate book profit? Okay, brother.
The net profit that has come out, whatever salary
remuneration you have given, actual, add that back.
Minus unabsorbed depreciation from that.
Book profit will come out.
You will have to make a separate calculation for book
profit.
What is book profit?
After depositing all expenses, net profit came out.
In that net profit, whatever salary you have given on an
actual basis, in P&L, add that back.
Minus what?
Unabsorbed depreciation.
Your idea will come out of the limit.
This was the whole topic, sir.
What are the expenses of a partnership firm? How much do
you get?
How much do you not get? We talked about interest and
salary here.
I hope this point is clear to you, friends.
Is the point clear?
Okay, sir.
I will stop this lecture here.
In the next lecture, we will discuss more interesting
topics.
Now, this chapter is counting its last breath, sir.
The last breath of this chapter can happen at any time.
That is why this chapter is requesting you not to leave
this chapter now.
It is counting its last breath, sir.
Anything can happen at any time.
See you in the next lecture, sir.
Thank you very much.