Capital gains tax on distribution of assets to partners

This query is : Resolved 

Avatar

Querist : Anonymous

Profile Image
Querist : Anonymous (Querist)
09 January 2012 Dear Experts, one of my client firm,in real estate business, there is some stock of land, now the partners decided to dissolve the firm, and decided to distribute the stock of land among the partners.

Now,will the capital gains tax attract or not?, the book value of land as on date is Rs.50 lacs, now the fair market value of same is Rs. 1.5.crore,

pl clarify the same

09 January 2012 In case of dissolution capital gains arises
only in the case of transfer of capital assets. It is stock in trade for the firm and the profit arising if any on such sale/ transfer will be treated as business income in the hands of the firm. Section 50C will also not apply for stock in trade.

Avatar

Querist : Anonymous

Profile Image
Querist : Anonymous (Querist)
09 January 2012 Sir, can the firm be advised to continue and trf. the stock of land to the partners?


09 January 2012 It seems that the partners' minds have changed. We professional always pray that no firm should get dissolved.

10 January 2012 Try to distribute the assets on book values to avoid any Business Profits.
Once transferred in the hands of partners such shall become their capital asset.

They can individually sell their part and cost of acquisition shall be taken the amount on which they got it from firm.

16 April 2013 can we deffer the distribution over years to minimise the tax...

16 April 2013 can we deffer the distribution over years to minimise the tax...

17 April 2013 If the Partnership is at will and partners desires to continue some assets in the firm
only, it is indicative that the firm is still in continuation.
.




You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Join CCI Pro
CAclubindia's WhatsApp Groups Link


Similar Resolved Queries


loading


Unanswered Queries