269 st partnership firm

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This discussion explores the applicability of Section 269ST of the Income Tax Act to partnership firms receiving cash capital contributions from partners. While there's no definitive clarification from the department, legal professionals are divided. Some argue that based on apex court rulings, a firm and its partners are not separate entities, thus Section 269ST might not apply to cash movements between them. Others suggest that if it does apply, the contribution could be viewed as a single event exceeding the ₹2 lakh limit.

sivareddy

sivareddy (Querist)

06 May 2024 as per income tax law 269 st can a partnership firm has right to take cash of 150000 in a day for 3 days as 450000 as a capital contribution from one of the partner

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

11 May 2024 As on the date, no clarification from department, be any notification or circular. Professionals are divided over the final decision, as per apex court judgement, it do not separate partnership firm and its partners as different entities. as such sec. 269ST is not applicable over either of them when any cash deposited or withdrawn by partner/s to or from the firm.
Second thought, if applicable then the definition of event may come into play, as such it will exceed the limit of 2 lakhs per event.

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

07 September 2024 Good Luck.

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