Capital gains

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Anandan Mudaliar (Querist)
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23 June 2012 1. I am a partner in firm
2. One of the asset of the firm is sold out
3. I get my share of the sale consideration

Option 1 If the firm is not dissolved

How is the capital gain calculated in the hands of the firm

How is the capital gain calculated in the hands of the partner

Option 2 If the firm is dissolved

How is the capital gain calculated in the hands of the firm

How is the capital gain calculated in the hands of the partner

CA Jeen paul

CA Jeen paul (Expert)
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23 June 2012 it is understood that the the asset is sold by the firm for a consideration and is duely recieved. the partner recived a share of the consideration.

in all cases the capital gain is taxable in the hands of the firm.
ref.sec 45(5) of IT act provides for the metord of calculation of capital gain where the capital assets are distributed amoung the partners at the time of dissolution.

in this case also capital gain is taxed in the hands of the firm and sales consideration deemed to be the fair market value of the asset on the date of dissolution.

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