Pass-through entities are deceptively complex: capital accounts, mid-year admissions, salary-to-partner traps. We're building PIT after CIT, with the same explainability.
A pass-through. The partnership computes divisible income but doesn't itself pay tax on it.
By the deed's profit ratio. We compute capital, current account and drawings effects.
Each partner reports their share in Cage 4 of their IIT return, at their personal slab rate.
We tie the partnership Form B to each partner's Form A, flagging reporting mismatches before submission.
Pro-rate income up to and from the admission date. Adjust capital accounts and re-allocate the residual.
Salary to a partner isn't deductible; it's an allocation of profit. We surface this when the deed mentions a salary.
A partner's loss share is capped at their capital + current account balance. The residual is carried in the partnership.
Treated as an appropriation, not expense. Re-classified to the partner's IIT as part of their distributive share.
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