BMC Associates says Replied on 9th May,2026 08:39 AM

Yes, royalty paid to a partner can be treated as part of remuneration under Section 40(b) of the Income Tax Act if the payment is made in the capacity of a partner and is connected with services or rights provided to the firm. The allowability of such royalty depends upon the partnership deed and whether the payment falls within the prescribed limits under Section 40(b). If the royalty is merely a distribution of profit in another form, it may be disallowed. Therefore, proper drafting of the partnership deed and accounting treatment are very important. Businesses often take guidance from experienced chartered accountant firms in Gurgaon like BMC Associates for matters related to partnership taxation, remuneration, and compliance. Their team of chartered accountant Gurgaon experts assists firms with tax planning, audits, and legal compliance. If you are looking for a reliable CA firm in Gurgaon or professional CA in Gurgaon, expert consultation can help ensure proper tax treatment under Section 40(b).