BMC Associates says Replied on 15th August,2026 04:13 AM

For income-tax purposes, royalty paid to a partner for professional work performed by him is generally treated as remuneration to the working partner, if the payment is in substance for services rendered by the partner and is authorized by the partnership deed. Under Section 40(b) of the Income-tax Act, remuneration includes payments such as salary, bonus, commission or remuneration to a working partner. Therefore, simply describing the payment as “royalty” in the deed does not automatically make it a separate deductible expense. Its actual nature and the terms of the partnership deed need to be examined. The payment must also satisfy the conditions and limits prescribed under Section 40(b) to be allowable as a deduction. For assistance with partnership taxation and allowable partner remuneration, businesses can consult experienced chartered accountant firms in gurgaon, a qualified chartered accountant gurgaon, a reliable ca firm in gurgaon, or a professional ca in gurgaon.