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Gupta (Designation)     07 January 2013

Can an nri be a partner in a partnership firm ?

Hello, Iam new to this Forum.


Iam an NRI and would like to know if I can be a partner in a Partnership firm in india. If yes, what are the tax rules for an NRI? Secondly, Can I have a working NRI in my indian partnership company payroll as I need the services from this person? Please let me know.



 5 Replies

Gupta (Designation)     08 January 2013

Hello everybody, I have couple of questions being an NRI.

1)What % of share can an NRI eligible to receive in a indian partnership firm?(any restriction), Can this partner NRI eligible to get paid in salary as well? If yes, is he eligible to pay in india and does he has to show it as a global income when he file his taxes both in USA and India?
2) Can I consider services from my other NRI friends and run a payroll in india, by deducting TDS in india so that I can deposit in thier indian bank accounts associated with their PAN numbers?( the partnership firm is a internet based services company).


Any help is highly appreciated. Thankyou

Gupta (Designation)     09 January 2013

can any body help?

CA. Vipul Jadhav (Partner)     18 January 2013

Your NRI Friend can become a Partner in the Partnership Firm. If he is performing some activities for the firm, then he can be termed as a working partner and also paid salary. Further while remitting the salary / income to the nri partner, you  will be required to deduct tds.


We can help you with your partnership formation and other tax related issues. Vipul Jadhav (9819384785)

Abdul Rahiman Thajuddeen   17 August 2019

Not eligible for remuneration since the NRI partner is not 'actively' engaged in the business. Inference is from explanation 4 of section 40(b) of the Income tax Act,1961.

Abdul Rahiman Thajuddeen   17 August 2019

And also the investments must have not been done in agricultural/plantation or real estate business or print media sector.

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