Change in the Proprietorship
This query is : Resolved
10 April 2008
Please suggest me the ways dat can be followed to change the proprietorship of the business in the name of another.(if any)?
Case 1 If the Person is Relative
Case 2 Any other person
Case 1 If the Person is Relative
Case 2 Any other person
10 April 2008
In either case you can sell or gift the business!
10 April 2008
THE PROPRIETORY FORM OF BUSINESS CAN CHANGE HANDS EASILY COMPARED TO OTHER FORM OF BUSINESS OWNERSHIP.THE METHOD OF CHANGE IN THE NAME OF ANOTHER IS BY WAY OF SALE ,WHEN THE LICENSES AND STATUTORY APPROVALS NEED TO BE CHANGED IN THE NAME OF THE NEW PERSON.
OFCOURSE SALE INVOLVES CAPITAL GAIN TAXATION BASED ON THE MOU RECORDED AND THE SALE CONSIDERATION RECORDED THEREIN BETWEEN THE OLD AND NEW PROPRIETOR.
GIFTING A BUSINESS AS ADVISED BY SRISRINIVASA RAGHAVAN IS ALSO POSSIBLE WHEN A GIFT DEED NEEDS TO BE MADE FOR THIS PURPOSE . ITEM NO 3 EXPLAINED BELOW WILL HELP THISQUERIEST.
THE LEGAL POSITION AND PROCEDURES OF GIFTIS GIVEN BELOW FOR THE BENEFIT OF ALL OR READERS.
Gift-tax need not be paid if:
1.The gift was given by a blood relative, irrespective of the gift value.
2.The value of the gift is less than Rs. 25,000.
3.The gift money was in return of something. So if you receive Rs. 100,000 from someone and in turn you give her a designer dress, you need not pay Gift-tax on the money received. This transaction will be considered a purchase and is therefor exempt from Gift-tax.
4.The gift was received on your wedding, irrespective of the gift value. But a gifts in excess of Rs. 25,000, received for any other occasion (birthday, anniversary, etc.) is taxable.
Procedures
There is no standard procedure to be followed for receiving a taxable gift. When you file your returns, you should add the gift amount to your annual income under 'Income from other sources'. You'll then be taxed depending on your total taxable income. However, make sure that you:
Accept the gift in writing via a gift deed. The deed will mention the value of the gift and the names of the persons giving and receiving the gifts.
Sign the gift deed and get it signed by the person giving you the gift.
Register the gift deed by paying the requisite stamp duty.
SOURCE:www.business.mapsofindia.com
R.V.RAO
OFCOURSE SALE INVOLVES CAPITAL GAIN TAXATION BASED ON THE MOU RECORDED AND THE SALE CONSIDERATION RECORDED THEREIN BETWEEN THE OLD AND NEW PROPRIETOR.
GIFTING A BUSINESS AS ADVISED BY SRISRINIVASA RAGHAVAN IS ALSO POSSIBLE WHEN A GIFT DEED NEEDS TO BE MADE FOR THIS PURPOSE . ITEM NO 3 EXPLAINED BELOW WILL HELP THISQUERIEST.
THE LEGAL POSITION AND PROCEDURES OF GIFTIS GIVEN BELOW FOR THE BENEFIT OF ALL OR READERS.
Gift-tax need not be paid if:
1.The gift was given by a blood relative, irrespective of the gift value.
2.The value of the gift is less than Rs. 25,000.
3.The gift money was in return of something. So if you receive Rs. 100,000 from someone and in turn you give her a designer dress, you need not pay Gift-tax on the money received. This transaction will be considered a purchase and is therefor exempt from Gift-tax.
4.The gift was received on your wedding, irrespective of the gift value. But a gifts in excess of Rs. 25,000, received for any other occasion (birthday, anniversary, etc.) is taxable.
Procedures
There is no standard procedure to be followed for receiving a taxable gift. When you file your returns, you should add the gift amount to your annual income under 'Income from other sources'. You'll then be taxed depending on your total taxable income. However, make sure that you:
Accept the gift in writing via a gift deed. The deed will mention the value of the gift and the names of the persons giving and receiving the gifts.
Sign the gift deed and get it signed by the person giving you the gift.
Register the gift deed by paying the requisite stamp duty.
SOURCE:www.business.mapsofindia.com
R.V.RAO
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