If a firm has shares of an unlisted company and acquisition price is say Rs. 10 Lacs . On dissolution the partners devide shares of Rs. 5 Lacs each being 50% sharing ratio.
If the Book value of such shares as on the date of such dissolution is say 40 Lacs. Whether Capital Gain Tax is applicable on the firm on the date of dissolution or it will be applicable when the partners sale such shares.
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Dissolution of firm and capital gain
Replies (8)
going concern?
yes
just like Walmart did with Flipkart
yes.... capital gains will attract in the hands of firm
am I right??
As per Section 45(4) distribution of assets by firm to partner at the time of dissolution shall be regarded as transfer and taxable in the year in which assets are distributed by firm to partner ..value shall be fair market value on the date of transfer...
correct mentioned by Neha pendse
Neha tell me a practical problem. If applicable tax is a considerable amount and since the firm has not received any amount in cash. How the tax will be paid ?
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