Introduction of land by partner in partnership firm as capit
This query is : Resolved
15 April 2013
Dear Sir/Mam,
When a partner introduce a land (which is registered in his own name)in partnership firm as his capital contribution then what are the procedures to do so. IS section 50C applicable on the same? If land is required to be registered in firm's name then whether stamp duty value of the land will be considered?
Thanks
When a partner introduce a land (which is registered in his own name)in partnership firm as his capital contribution then what are the procedures to do so. IS section 50C applicable on the same? If land is required to be registered in firm's name then whether stamp duty value of the land will be considered?
Thanks
16 April 2013
As per sec 45(3), amount entered in books will be deemed as sale price in the hands of partner. But if such value is less than the value adopted for stamp duty purpose, then as per sec 50c, such value adopted for stamp duty propose will be treated as the sale price.
He should transfer the land in the name of firm through a proper transfer deed.
The value entered in the books will be treated as the capital contribution of the partner and the same shall be treated as cost of acquisition in the hands of firm.
In case the transfer amount for stamp duty purpose is more than the actual transfer amount, then the diffrence will be treated as income from other source in the hands of firm.
There for it is advisable to the partner, not to transfer the property below the value for stamp duty purpose. Hence in that case, the capital gain in the hands of partner will remain the same but no other source income will arise in the hands of the firm..
Pls do ask if anything above, is confusing.
He should transfer the land in the name of firm through a proper transfer deed.
The value entered in the books will be treated as the capital contribution of the partner and the same shall be treated as cost of acquisition in the hands of firm.
In case the transfer amount for stamp duty purpose is more than the actual transfer amount, then the diffrence will be treated as income from other source in the hands of firm.
There for it is advisable to the partner, not to transfer the property below the value for stamp duty purpose. Hence in that case, the capital gain in the hands of partner will remain the same but no other source income will arise in the hands of the firm..
Pls do ask if anything above, is confusing.
Message likes :
1 times
17 April 2013
Under which sect. income will be treated as income from other source in hands of firm if immovable property is introduced by partner as his capital contribution for value below the value for stamp duty purpose?
Sect. 56(v),(vi)... is applicable to individual and HUF or is also applicable to Partnership Firm?
Kindly highlight in matter.
Sect. 56(v),(vi)... is applicable to individual and HUF or is also applicable to Partnership Firm?
Kindly highlight in matter.
17 April 2013
..............................................
17 April 2013
I am extremely sorry for my above suggestion. I am therefore rectifying my above words.
There will be no other source income in the hands of the firm. I mistakenly applied section 56(2)(Viia) on the above mentioned transaction. But the said section is applicable on transfer of shares only. Except other source treatment, everything else mentioned above are correct.
There will be no other source income in the hands of the firm. I mistakenly applied section 56(2)(Viia) on the above mentioned transaction. But the said section is applicable on transfer of shares only. Except other source treatment, everything else mentioned above are correct.
31 May 2013
As a partner anything can be contributed which has some monetary value but that asset has to be transferred in the name of the firm at a pre-fixed value. The value so arrived shall be treated as the capital contribution of the partner. If it is immovable property then the same is to be transferred in the name of the firm. The partner is required to pay capital gains tax on market value
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Tax on Deemed Capital Gain
- Exiting partner in partnership firm in gst portal
- Type of Capital Gain
- TDS on property - Form 141 query
- F & O PROFIT REPORTING FOR AY 2026-27
- ASMT-10 received from A O
- Loss of interest in PF transfer from EPFO to Trust
- Average Cost Of High Quality Diamonds
- Applicability of Books of Account for Commission Income (Sections 194D & 194H)
- Gst on travel by air for business purposes
- Housing Society-ITR5
- TDS on Rent received on redevelopment of building
- Indian IT Portal issue in computing tax as per UK-India DTAA
- Capital Gains on sale of residential flat
- Upload Level ValidationITR3Category of Defect B/D
- PF Taxable Income
- Clarification on Tax Audit Applicability and Reporting of F&O Transactions in ITR-3
- Interest credited in FY2025-2026 & TDS therein by EPFO does not reflect in AIS or Form 26AS
- 44ad eligble money lending interest
- Taxation in the hands of Landowner under JDA
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
