What is the remuneration given to LLP partners?

In a Limited Liability Partnership (LLP), the remuneration or payment to partners is a critical aspect governed by both the LLP Agreement and the Limited Liability Partnership Act of 2008. These regulations ensure fair compensation for partners while aligning with legal and tax requirements. Let’s delve into the regulations and guidelines concerning partners’ remuneration in LLPs.

According to Income Tax (IT) guidelines, the remuneration to partners in an LLP must adhere to specific limits:
First Rs. 3 Lakhs of Book Profit: The remuneration on the initial Rs. 3 lakhs of book profit or in the case of a loss, Rs. 1,50,000 or 90% of book profit, whichever is greater.

Remainder of Book Profit: For the remaining book profit, the remuneration should not exceed 60% of the book profit.