Partnership Firm / LLP Tax Calculator
Compute allowable partner remuneration and interest under Section 40(b), taxable income and tax at the flat 30% rate — live, on one screen.
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Computation of income & tax
Firm / LLP · Flat 30%Get your firm / LLP return filed by a CA
We optimise partner remuneration, compute 40(b) correctly and file your firm's ITR-5 accurately.
Disclaimer: Indicative estimate for a resident partnership firm / LLP. Actual tax may vary with disallowances, capital gains, special-rate income and AMT. Remuneration allowability requires an authorising partnership deed. Rates per Finance Act 2025.
How a firm / LLP is taxed
Unlike individuals, a partnership firm or LLP does not get slabs or a basic exemption. Its whole taxable income is taxed at a flat 30%, plus a 12% surcharge if total income exceeds ₹1 crore, plus a 4% health & education cess on top of tax and surcharge. Partner remuneration and interest on capital are deductible in the firm's hands — but only within the Section 40(b) limits.
Section 40(b) — remuneration & interest limits
The firm can deduct partner remuneration only up to the ceiling below, calculated on book profit. Any remuneration paid above this ceiling is disallowed and added back. Interest on partner capital is deductible up to 12% p.a. Both deductions need authorisation in the partnership / LLP deed.
| On first ₹6,00,000 of book profit | 90% or ₹3,00,000, whichever is higher |
| On the balance of book profit | 60% |
| Income tax | Flat 30% |
| Surcharge (if income > ₹1cr) | 12% |
| Health & education cess | 4% |
Worked example
A firm has a net profit of ₹20,00,000 before partner payouts. It pays ₹6,00,000 remuneration and ₹1,00,000 interest on capital (within 12%). Here is how the tax works out.
Key terms explained
Flat 30% rate
A firm or LLP is taxed at a single flat 30% on its whole taxable income. There is no graduated slab structure and no basic exemption limit as there is for individuals.
No slab benefit
Because there are no slabs, the firm cannot enjoy the lower 5% / 10% bands. Every rupee of taxable income after 40(b) deductions is charged at 30% plus cess.
Section 40(b)
Caps deductible partner remuneration and interest. Remuneration is limited to 90% of the first ₹6L of book profit (or ₹3L, whichever is higher) plus 60% of the balance; interest to 12% p.a.
Surcharge > ₹1cr
When the firm's total income crosses ₹1 crore, a 12% surcharge is added on the income tax (subject to marginal relief). The 4% cess then applies on tax plus surcharge.
Questions people ask
Short answers on Partnership Firm / LLP Tax. Tap a question to open it.
01At what rate is a partnership firm taxed?
A flat 30% on total income, plus a 12% surcharge where income exceeds ₹1 crore, plus 4% health and education cess. There is no slab and no basic exemption limit for a firm or an LLP.
02Is the partners' share of profit taxed again?
No. The share of profit from a firm is exempt in the partner's hands under section 10(2A), because the firm has already paid tax on it. Remuneration and interest received from the firm are taxable in the partner's hands as business income.
03How does remuneration reduce the firm's tax?
Remuneration within the section 40(b) limits is deductible for the firm, and taxed in the partner's hands at their slab rate — often lower than 30%. Structuring within the limits is the main planning lever for a firm.
04Does alternate minimum tax apply?
Yes. Where a firm or LLP claims certain deductions, AMT at 18.5% of adjusted total income can apply, with credit available for later years. It is not triggered where no such deduction is claimed.
05When is a tax audit required for a firm?
On the same thresholds as any business — turnover above ₹1 crore, extended to ₹10 crore where cash receipts and payments are each within 5% of the total, or professional receipts above ₹50 lakh.
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Disclaimer: This tool gives indicative results for general guidance only and is not professional advice. Please verify with a qualified CA before acting on the numbers.