Tax on transfer of stock in trade

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nawal khandelwal (Querist)
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25 December 2014 I running a pvt ltd co. having stock in trade valued Rs. 2 Crore. now I like to transfer this stock in trade in new partnership firm as as capital contribution. any tax libilities is arise.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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25 December 2014 The pvt ltd company is liable for tax on the profits made by it from such transfer and the same can be termed as business income of the company.
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If the company transfers the stock at cost, there will be no profit.
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Where the amount involved is more than 5 crore rupees, implications of provisions of Section 92BA must be duly considered.
.

Rupesh Jain

Rupesh Jain (Expert)
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26 December 2014 you have to selling goods by pvt ltd to firm and co will pay the tax on his income under business head.

if it is related then clause of transfer pricing applicable if value is rs.5 crore or more.

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