Transfer in interest of LLP
This query is : Open
14 August 2022
Me and cousin have 50% partnership in LLP with 50000 capital each.
We ran the business for 3 years. LLP now has around 1Cr assets in balance sheet.
We are planning to sell the company. The 2 new partners will be putting 1Cr into company. We are planning to take that money and exit.
Can someone advice on how to go about doing this. What will be the tax implication for exiting partners?
We ran the business for 3 years. LLP now has around 1Cr assets in balance sheet.
We are planning to sell the company. The 2 new partners will be putting 1Cr into company. We are planning to take that money and exit.
Can someone advice on how to go about doing this. What will be the tax implication for exiting partners?
17 August 2022
Liability of the firm for taxation will be in terms of s.9B and s.45(4) of ITA, 1961?
As regards exiting partners tax liability, it depends on what is the sum standing to credit of retiring/ exiting partner’s capital account and what is the amount being transferred. If a sum paid to exiting partners is more than the sum standing to credit in partners’ capital account, excess amount only may be liable to Capital Gain Tax in terms of s.45 of ITA, 1961. Exemption may be available if such amount is invested in say purchase of residential house or certain bonds.
Author: Advocate Ravish Bhatt
Gmail: ravishdbhatt@gmail.com
Link to Linkedln Profile: https://bit.ly/3IDGfsU
As regards exiting partners tax liability, it depends on what is the sum standing to credit of retiring/ exiting partner’s capital account and what is the amount being transferred. If a sum paid to exiting partners is more than the sum standing to credit in partners’ capital account, excess amount only may be liable to Capital Gain Tax in terms of s.45 of ITA, 1961. Exemption may be available if such amount is invested in say purchase of residential house or certain bonds.
Author: Advocate Ravish Bhatt
Gmail: ravishdbhatt@gmail.com
Link to Linkedln Profile: https://bit.ly/3IDGfsU
17 August 2022
Does "sum standing to credit of retiring/ exiting partner" include assets and rental deposits?
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