New Income tax section for Partnership Deed and LLP

 Section 35(e) — Partner Remuneration & Interest

(Replaces Section 40(b) of the old Act)

• Deduction allowed only for working partners whose payments are authorised in the deed
• Revised remuneration limits: ₹3,00,000 or 90% of first ₹6,00,000 of book profit (Whichever is higher), then 60% of balance book Profit
• Interest cap: 12% simple interest p.a. on capital
• Sleeping/non-working partners get zero deduction for remuneration.
• Retrospective deed changes don't validate past payments

 Section 325 — Assessment as a Firm

(Replaces Section 184 of the old Act)

• Firm must have a written instrument with individual shares specified
• Certified copy of deed must accompany the first ITR seeking firm assessment
• Any change in constitution requires filing a revised certified deed
• Non-compliance triggers Section 326 — full disallowance of all partner payments at firm level AND non-taxability in partners' hands