Kindly solve this tax issue sir, there are 3 persons from a family formed LLP some years back, with equal share capital, later on purchased a capital asset (land) for Rs.20 lakhs. That land present market value is Rs.5 crores. Out of three partners one partner wants to retire from LLP firm at his actual share capital contribution. Because they are from one family, remaining partners wants to settle his share at actual contribution only. The problem is what are the tax complications applicable for the above situation, and as it is LLP registered under ROC, is there any valuation rules applicable for valuation of retiring partners share, like in Pvt. Ltd? And in whose hands capital gains tax will be levied? Need expert suggestion please.... Thanks in advance..
14 February 2019
Section 50CA is introduced in case of transfer of unlisted shares in a company (not firm or LLP). Capital gain on transfer of assets to partners and vice versa does not arise at the time of retirement of one of partners as section 45(4) is not applicable at the time of retirement of partners and business is continued. In my opinion, capital gain shall not arise in the given case.
CAclubindia
