Capital Gain - Urgent- Please help

This query is : Resolved

Shakthi (Querist)
Follow

10 August 2010 I am a partner in a firm which has 4 partners.My capital account balance in the firm is Rs 5 lakhs.

If i retire from the partnership, getting an compensation of Rs 8 lakhs, whether the balance 3 lakhs will be taxable??

Please help- Very urgent

CA Punit

CA Punit (Expert)
Follow

10 August 2010 Amount received by retiring partner in respect of his share in Partnership firm including Goodwill is not assessable as Capital Gains.
Case - Mohanbai Padmabhai 165 ITR 166 (SC)

The surplus of Rs. 3 Lacs is not chargable to tax as it is in nature of Goodwill, which including the other sums is not taxable in view of above judgement.