Particular Case 1 Case 2 Case 3

Number of partners 3 4 8
Profit-sharing ratio Equal Equal Equal
Total capital contribution of partners (each contrib 1,500,000 3,000,000 8,500,000
600,000 1,200,000 6,000,000 100%
Tax on firm
Income 600,000 1,200,000 6,000,000 90%
Less: salary 342,000 594,000 3,078,000
LESS: INTEREST @12% 180,000 360,000 1,020,000 80%
NET INCOME 78,000 246,000 1,902,000
TAX @ 30.9% 24,102 76,014 587,718 70%
Tax liability of each partner 8,034 19,004 73,465
Tax on partner Case 1
60%
Particular Case 1 Case 2 Case 3 No of Part 3
Number of partners 3 4 8 Profit of t 600,000
50%
Salary 114,000 148,500 384,750 Income by 200,000
Interest 60,000 120,000 340,000
40%
Income 174,000 268,500 724,750 200,000
Income after 80C DEDUCTIONS 24,000 118,500 574,750 Net 50,000
Tax on net income 0 0 41150 30% 0

Total tax 8,034 19,004 114,615 20% 0

10%

0%
3

TAX L
Particular Case 1 Case 2 Case 3 140,000
No of Partners 3 4 8
Profit of the previous year 2016-17 600,000 1,200,000 6,000,000 120,000
Income by each individual 200,000 300,000 750,000
Net Income after 80C deductions 50,000 150,000 600,000 100,000
Taxable Income 0 0 46,350
TAX LIABILITY

80,000

60,000

Case 1 Case 2 Case 3

40,000
No of Partners 3 4 8
Partnership Firm 8,034 19,004 114,615
20,000
proprietorship Firm 0 0 46,350

0
 tax incidence on partnership fi rm
100% 80,000

90%
70,000

80%
60,000
70%

Case 2 Case 3 50,000

60%
4 8
1,200,000 6,000,000
50% 40,000
300,000 750,000

40%
300,000 750,000 30,000
150,000 600,000
30% 0 46350
20,000
20% 0 46,350

10,000
10%

0% 0
3 4 8

TAX LIABILITY: PARTNERSHIP FIRM V/S PROPRIETORSHIP FIRM

140,000

120,000

100,000
TAX LIABILITY

80,000

60,000

40,000

20,000

0
3 4 8
20,000

0
3 4 8
Taxable in Interest onSalary payaTaxable income ofTax liability of the fi Tax liabilit Total tax as percentage of income (5+6) as
1 2 3 4 5 6 7
Rs. Rs. Rs. Rs. Rs. Rs.
500,000 120,000 318,000 62,000 19,160 0 3.83%
1,000,000 120,000 618,000 262,000 80,960 14,210 9.52%
1,500,000 120,000 918,000 462,000 142,760 59,320 13.47%
2,000,000 120,000 1,218,000 662,000 204,560 121,120 16.28%
2,500,000 120,000 1,518,000 862,000 266,360 182,920 17.97%
3,000,000 120,000 1,818,000 1,062,000 328,160 244,720 19.10%

Taxable incSalary to dTaxable in Tax liability of t Taxable income of X Tax liabilit Total tax (7) as% of (1)
1 2 3 4 5 6 7 8
Rs. Rs. Rs. Rs. Rs. Rs. Rs.
500,000 390,000 110,000 33,990 195,000 0 33,990 6.80%
1,000,000 690,000 310,000 95,790 345,000 4,640 105,070 10.51%
1,500,000 990,000 510,000 157,590 495,000 20,090 197,790 13.19%
2,000,000 1,290,000 710,000 219,390 645,000 55,620 330,630 16.53%
2,500,000 1,590,000 910,000 281,190 795,000 86,520 454,230 18.17%

3,000,000 1,890,000 1,110,000 342,990 945,000 117,420 577,830 19.26%

Firm company

500,000 3.83% 6.80% 0 0

1,000,000 9.52% 10.51% 0 4,640
1,500,000 13.47% 13.19% 0 20,090
2,000,000 16.28% 16.53% 0 55,620
2,500,000 17.97% 18.17% 0 86,520
3,000,000 19.10% 19.26% 0 117,420
as percentage of income (5+6) as % of (1)
TAX INCIDENCE ON PARTNERSHIP FIRM AND PARTNERS
100% 60000 350,000
90% 0 -250000 0 300,000
80%60000 309,000 369,000 119,000 14210
70% 250,000
60000 459,000 519000 250000 25750 19000 59320
60% 200,000
50%
60000 609,000 669000 250001 25750.1 169000 121120
40%60000 759,000 819000 250002 25750.21 319000 182920
150,000
30%60000 909,000 969000 250003 25750.31 469000 244720
100,000
20%
50,000
10%
0% 0
500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000
Interest Sal a ry taxable Income
Fi rm Tax Li abl i ty Pa rtner Tax Lia bl i l ty

(7) as% of (1) TAX INCIDENCE ON PRIVATE LIMITED COMPANY AND DIRECTORS
100% 400,000
60000
90% 0 -250000 0 350,000
345000
80% 0 345,000 95,000 4640
300,000
495000
70% 0 495000 245,000 20090
645000
60% 0 645000 250000 25750 145000 55620 250,000
795000 0 795000 250001 25750.1 295000 86520
50% 200,000
945000
40% 0 945000 250002 25750.21 445000 117420 150,000
30%
100,000
20%
10% 50,000

0% 0
500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000
SALARY COMPANY TAXABLE INCOME
TAX BY COMPANY TAX BY DIRECTOR

Firm V/s Company

25.00%

20.00%
Total Tax as % of income

15.00%

10.00%

5.00%

0.00%
500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000
Total
5.00%

0.00%
500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000
proprietorship
Taxable in Interest onSalary payaTaxable income ofTax liability of the fi Tax liabilit Total tax as percentage of income (5+6) as % o
1 2 3 4 5 6 7
Rs. Rs. Rs. Rs. Rs. Rs.
600,000 120,000 378,000 62,000 31,520 0 5.25%
1,200,000 120,000 738,000 262,000 105,680 0 8.81%
1,800,000 120,000 1,098,000 462,000 179,840 0 9.99%
2,400,000 120,000 1,458,000 662,000 254,000 0 10.58%
3,000,000 120,000 1,818,000 862,000 328,160 14,200 11.41%
3,600,000 120,000 2,178,000 1,062,000 402,320 45,100 12.43%

Taxable incSalary to dTaxable in Tax liability of t Taxable income of X Tax liabilit Total tax (7) as% of (1)
1 2 3 4 5 6 7 8
Rs. Rs. Rs. Rs. Rs. Rs. Rs.
500,000 450,000 50,000 15,450 90,000 0 15,450 3.09%
1,000,000 900,000 100,000 30,900 180,000 0 30,900 3.09%
1,500,000 1,350,000 150,000 46,350 270,000 0 46,350 3.09%
2,000,000 1,800,000 200,000 61,800 360,000 6,180 92,700 4.64%
2,500,000 2,250,000 250,000 77,250 450,000 15,450 154,500 6.18%
3,000,000 2,700,000 300,000 92,700 540,000 33,990 262,650 8.76%

Firm company

500,000 5.25% 3.09% 0 0

1,000,000 8.81% 3.09% 0 4,640
1,500,000 9.99% 3.09% 0 20,090
2,000,000 10.58% 4.64% 0 55,620
2,500,000 11.41% 6.18% 0 86,520
3,000,000 12.43% 8.76% 0 117,420
as percentage of income (5+6) as % of (1)
TAX INCIDENCE ON FIRM AND FIVE PARTNERS
60000
100% 450,000
15,760 60000 189000 249000 -1000 0 0
90% 400,000
52,840 60000 369000 429000 179000 17900 17900
80% 350,000
89,92070% 60000 549000 609000 250000 25000 109000 21800 46800
300,000
127,00060% 60000 729000 789000 250000 25000 289000 57800 82800
250,000
178,28050% 60000 909000 969000 250000 25000 469000 93800 118800
200,000
246,26040% 60000 1089000 1149000 250000 25000 649000 129800
150,000
154800
30%
20% 100,000
10% 50,000
0% 0
600,000 1,200,000 1,800,000 2,400,000 3,000,000 3,600,000
Interest Sa l ary taxa bl e Income
Firm Tax Li a bl i ty Partner Tax Li abli l ty

(7) as% of (1)

TAX INCIDENCE ON PRIVATE LIMITED COMPANY AND FIVE DIRECTORS
100% 100,000
90% 90,000
-70,000 -7000
80% 80,000
20,000 2000 -4500
70% 70,000
60% 60,000
50% 50,000
40% 40,000
30% 30,000
20% 20,000
10% 10,000
0% 0
500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000
SALARY COMPANY TAXABLE INCOME
TAX BY COMPANY TAX BY DIRECTOR

Firm V/s Company

14.00%

12.00%
Total Tax as % of income

10.00%

8.00%

6.00%

4.00%

2.00%

0.00%
500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000
 8.00%

Total Tax as % of i
6.00%

4.00%

2.00%

0.00%
500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000