Query relating to tax effect on gooodwill

palak (article) (46 Points)

04 September 2012  

Dear Members and colleuges,

I m having  query relating to tax effect on goodwill..

Starting with an example- There is a partnership firm having its net worth Rs. 10 Lacs and now firm is selling its networth to company named XYZ ltd. at Rs. 12 Lacs.

Now the difference of Rs. 2 Lacs would be goodwill of partnership firm. 

My question is will tax would be charged to partnership firm on receiving Rs. 2 Lacs and whether any As will apply for the same...??

Thanks in advance.

Regards

Palak