Explanation
Partnership firm taxation: (1) Firm pays tax at 30% flat + applicable surcharge + cess on its total income. No basic exemption for firms. (2) Working partners can receive salary/bonus/commission from the firm — allowed deduction in the firm under §40(b) at prescribed limits (₹3L or 90% of first ₹3L book profit, plus 60% above ₹3L). (3) Interest paid to partners allowed at up to 12% per annum under §40(b). (4) Partner's share of profit is EXEMPT in the partner's hands under §10(2A)/§11 of IT Act 2025 — no double taxation. (5) Salary and interest received by partners is taxable in their hands as PGBP income. (6) From 1 April 2025: TDS at 10% on salary/interest paid to partners under §194T above ₹20,000 (Code 1036 under IT Act 2025 §393). File ITR-5 for the firm. Verify on the income-tax portal before filing.