Please tell me tax liability on conversion of partnership firm into Private limited company.what would be tax liability of partners ?? How Depreciation to be calculated on fixed assets. As per Income tax act for assets used for more than 6 month we take full year depreciation. In Partnership firm assets is used for 7 month and after that in privat limited company for 5 month.
11 January 2011
conversion from firm to company is a special case for depreciation. hence, depreciation should be charged on the basis of time period of utilization. time is to be divided from the day on which the asset is transferred to company.
in given case, depn. for 7 months would be levied for firm.
tax liability of partners would be limited only upto date of conversion.
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