Section 184 of ITA, 1961 : Section 184: Assessment As A Firm

Explanation using Example

Imagine a scenario where three friends, Aarav, Bhavya, and Chetan, decide to start a business together. They form a partnership firm called 'ABC Traders' to sell organic products. To ensure that their firm is assessed as a firm for tax purposes under the Income-tax Act, 1961, they draft a partnership deed. This instrument specifies that Aarav will receive 40% of the profits, Bhavya 35%, and Chetan 25%.

When it's time to file their tax returns for the year, they include a certified copy of the partnership deed with their return, as required by Section 184(2). This deed is signed by all three partners, none of whom are minors. Since they have complied with the ...

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