Distribution of capital assets on a dissolution of firm/AOP or BOI [Section 45(4)

Event:
Transfer of a Capital Asset by way of distribution on dissolution of a firm or otherwise.

Year of Chargeability
 Previous year in which transfer takes place from firm to the partners.

Consideration: 
FMV as on date of transfer.

Cost of acquisition
of the firm is the value of the Asset recorded in the books.

Assessee chargeable to tax:
Partnership Firm.

NOTE-

-Tax treatment accorded to a LLP and a general partnership is the same, the conversion from a general partnership firm to an LLP will have no tax implications if the rights and obligations of the partners remain the same after conversion and if there is no transfer of any asset or liability after conversion. However, if there is a change in rights and obligations of partners or there is a transfer of asset or liability after conversion, then the provisions of section 45 would get attracted. 

- If a firm distributes a depreciable asset, the capital gain/loss shall always be short-term capital gain/loss.


For Budget'2018 Impact- http://amzn.to/2nQtbYu

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