LIMITED LIABILITY PARTNERSHIP
REVISION---- ALL RELEVANT PROVISION
(1)--- STATUS --- Under Income Tax Act, general partnership firm & LLP have been treated on same footing i.e. tax rates applicable for firm shall apply to LLP and similarly salary & interest provisions[sec. 40(b)] shall apply......Profit share in LLP shall be exempt in hands of Partner.
(2)--- SIGNING OF RETURN [ SEC. 140 ] --- In case of ROI of LLP, same shall be signed by designeted partner, and in case of absence of sane shall be signed by any partner.
(3)--- CONVERSION OF COMPANY INTO LLP [ SEC. 47(xiiib)] - Not Regarded as transfer for the purpose of levy of capital gains tax u/s 45, subject to fulfillment of certain conditions...This clause has been introduced to facilitate conversion of small private firms and unlisted public companies into LLPs.
(4)--- SUBSEQUENT DEFAULT [SEC. 47A(4)] -- If subsequent to the transfer, any mentioned conditions are not complied with, the capital gains not charged u/s 45 would be deemed to be chargeable to tax in the P.Y. in which the conditions are not complied with, in the hands of LLP or the shareholder of predecessor company, as the case may be.
(5)--- COA & PERIOD OF HOLDING [ SEC. 49(1)] --- The COA of the capital asset for the successor LLP shall be deemed to be the cost for which the predecessor company acquired it...It would be further increased by the COI of the asset incurred by the predecessor company or the successor company...( Assets covered by section 35 AD, actual cost shall be NIL).
Period of holding of such capital asset in the hands of successor LLP shall include duration for which capital asset held by the predecessor company.
(6)---C/F & SET-OFF [ SEC.72A(6A)] -- Business loss and unabsorbed dep. of the predecessor company shall be deemed to be business loss & unabsorbed dep. of the successor LLP of the P.Y. in which conversion took place i.e. The sucessor LLP would be allowed to carry forward and set-off the busines loss and unabsorbed dep. of the predecessor company for fresh 8 years...
If the entity fails to fulfill any of the conditions mentioned, the benifit of set-off of business loss etc. availed by LLP would be deemed to be the profits & gains of the LLP chargeable to tax in the P.Y. in which the LLP fails to fulfill any of the conditions .
(7)--- WDV & DEP. [SEC. 43(6) & 32(1)] -- The actual cost of the block of assets in the case of the sucessor LLP shall be the WDV of the block of assets as in the case of the predecessor company on the date of conversion...
such dep. shall be apportioned between the predecessor company & the successor LLP in the ratio of the number of days for which the assets were used by the.
(8)--- VRS [SEC. 35DDA(4A)] -- If a company eligible for deductiob u/s 35DDA in respect of expenditure incurred under VRS (1/5th of such exp allowed over a period of 5 years) is converted into a LLP and such provision satifies the conditions laid doen in sec. 47(xiiib), then. the LLP would be eligible for such deduction from the year in which the transfer took place....
GOOD LUCK FOR STUDY
Regards
@ Vipul Jain @
CAclubindia
