CAPITAL GAINS IN CASE OF DISSOLUTION OF PARTNERSHIP

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 September 2010 I HAVE A PARTNERSHIP FIRM BETWEEN ME & MY MOTHER
ME - 80%
MOTHER - 20%
I HAD TRANSFERED A LAND & BUILDING TO THE FIRM

ON THE EVENT OF DISSOLUTION I GOT THE LAND TRANSFERED IN MY NAME
NOW MY QUESTION IS THAT AS I WAS ALREADY HOLDER OF 80% IN THE ASSETS OF THE FIRM SO SHALL I BE LIABLE TO PAY CAPITAL GAINS ON THE 20% OF THE GAINS THAT I GOT TRANSFERED FROM MY MOTHER OR 100% OF THE GAIN

ALSO WOULD ANYTHING CHANGE IF SUCH SHARE WAS TRANSFERED BY MY MOTHER THROUGH GIFT

PLEASE TEL A WAY TO AVOID MAXIMUM OR ALL TAX

Aditya Maheshwari

Aditya Maheshwari (Expert)
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22 September 2010 On dissolution of firm or transfer of assets of the firm to the partners the partnership firm will pay tax on the market value of the assets as per section 45(4) and receipt in the hands of the partner would be tax free.

(4) The profits or gains arising from the transfer of a capital asset by way of distribution of capital assets on the dissolution of a firm or other association of persons or body of individuals (not being a company or a co-operative society) or otherwise89, shall be chargeable to tax as the income of the firm, association or body, of the previous year in which the said transfer takes place and, for the purposes of section 48, the fair market value of the asset on the date of such transfer shall be deemed to be the full value of the consideration received or accruing as a result of the transfer.]