tax on LLP

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CAyashoda somani

CAyashoda somani (Querist)
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09 January 2011 how we can calculate tax under IT ACT conversion of partnership firm in to LLP?

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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09 January 2011

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Automatic Transfer
All the assets and liabilities of the firm immediately before the conversion become the assets and liabilities of the LLP.

No Stamp Duty
All movable and immovable properties of the firm automatically vest in the LLP. No instrument of transfer is required to be executed and hence no stamp duty is required to be paid.

No Capital Gain Tax
No Capital Gains tax shall be charged on transfer of property from firm to LLP.

Continuation of Brand Value
The goodwill of the firm and its brand value is kept intact and continues to enjoy the previous success story with legal recognition.

Carry Forward and Set off Losses and Unabsorbed Depreciation
The accumulated loss and unabsorbed depreciation of Partnership firm is deemed to be loss/ depreciation of the successor LLP for the previous year in which conversion was effected. Thus such loss can be carried for further eight years in the hands of
the successor LLP.

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