Conversion of partnership firm into llp effect on taxation, pan
This query is : Resolved
Quick Summary
10 January 2024
partnership firm is there which are converting into Limited Liability partnership reason is to upgrade entity for marketable point of view.
but question arised , in this change in entity PAN number could have change or not? becasue we need change in PAN as general thinking. is it correct.
also development agreement had executed in firm by paid stamp duty for property development, by conversion fo entity , shall there need to pay again stamp duty as per transfer of property act, registration act and so on.
pls experts opinion . with kind regards.
but question arised , in this change in entity PAN number could have change or not? becasue we need change in PAN as general thinking. is it correct.
also development agreement had executed in firm by paid stamp duty for property development, by conversion fo entity , shall there need to pay again stamp duty as per transfer of property act, registration act and so on.
pls experts opinion . with kind regards.
CA R SEETHARAMAN
(Expert)
10 January 2024
New PAN number required.
Conversion of firm into Limited Liability Partnership does not give rise to capital gain since no transfer of asset is involved in conversion. When Partnership Firm is converted into Limited Liability Partnership, all the properties of firm shall vest in the LLP. There is no dissolution of firm. Hence Section 45(1) relating to capital gain is not applicable to the Limited Liability Partnership. Further, as there is no transfer of Asset is involved, requirement of transfer deed is not necessary and hence no stamp duty is payable.
Conversion of firm into Limited Liability Partnership does not give rise to capital gain since no transfer of asset is involved in conversion. When Partnership Firm is converted into Limited Liability Partnership, all the properties of firm shall vest in the LLP. There is no dissolution of firm. Hence Section 45(1) relating to capital gain is not applicable to the Limited Liability Partnership. Further, as there is no transfer of Asset is involved, requirement of transfer deed is not necessary and hence no stamp duty is payable.
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CA R SEETHARAMAN
(Expert)
25 January 2024
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