Dear Sir
A Partner Ship Firm is not registered, as per IT Act benfits is not given to that firm ? please tell a partnership firm is not registered as per Partnership act any problem and any disadvantages as per IT Act.
thanks in advance
6 Replies
Rahul Gupta
(Chartered Accountant)
(644 Points)
Replied 19 October 2011
Under the Income Tax Act, a partnership firm is taxed as a distinct entity from its partners. Thers is no distinction in taxation between a registered and unregistered firm. However the firm must be evidenced by its partnership deed. A Partnership deed is the blue print of the rights and liabilities of the partners in respect to their right & liabilities, capital sharing, interest on capital, profit sharing, etc to the business.
The distinction between the registered and unregistered occurs in other Acts where the Registered Firms enjoys some priveleges over the Unregistered Firms. Like the Registered Firm can Sue the third party while the unregistered can't.
But taxation doesn't distinguish these two.
Kashif Mulla
(CA Final Student)
(38 Points)
Replied 19 October 2011
No consequences in Income Tax act irrespective of whether the partnership firm registered or not , the only requirment is it should be backed up by partnership deed.
Rahul Suneja
(CA-Final, CS-Exec)
(215 Points)
Replied 19 October 2011
For Icome tax it doesn't matter that the firm is registered or not.The firm has to pay tax at flat rate of 30%
But under Partnership Act 1932,there are certain benefits given to partnership firm
CA. Manish Chandarana
(Practising CA)
(100 Points)
Replied 20 October 2011
No difference btwn registered n unregistered Partnership firm under I.T.Act Both r taxed @ 30%
BHUPENDRA JAIN
(STUDENT)
(29 Points)
Replied 20 October 2011
I HAVE AN QUERY REGARDING CONSTITUTION OF AN UNREGISTERED PARTNERSHIP FIRM.. .
A PARTNERSHIP FIRM HAS THREE PARTNERS AND TWO PARTNERS WANT TO RETIRE AND ONE NEW PARTNER WANT TO ENTER IN THE FIRM AT THE SAME TIME.. WHICH TYPE OF DEED OR AGREEMENT HAS TO BE FORMED BETWEEN THE PARTNERS....???? CAN ANYONE HELP..???
Rahul Gupta
(Chartered Accountant)
(644 Points)
Replied 20 October 2011
I think you must execute the Deed stating RECONSTIUTTION OF FIRM in which both the partners can retire and the new one can admit to the firm at the same time. If you execute 2 different deeds than at the time of first execution i.e. Retirement Deed only 1 partner left which is not possible in Partnership firm.
So better to execute the Deed stating Reconstitution of Firm.
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