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Dual Current account of LLP

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ramya s

25 Points Posted on 01 July 2022

Dear Tax Experts,

We are 3 partners in a registered LLP - Me, My wife and biz partner.

W have 2 questions:

1> Can we have more than one biz/curent account in same or different banks?

2>If we can have more than one biz/current account then can we apply composite tax for one account and the other as normal account.

Replies (8)

Quick Summary

This discussion addresses whether a Limited Liability Partnership (LLP) can operate multiple business current accounts. The consensus is that while an LLP can have more than one bank account, all accounts must adhere to the same tax scheme – either composite or normal. It's not possible to apply different tax schemes to different accounts. The conversation also touches upon the GST composition scheme limits and the potential impact of switching between schemes.

CA Rashmi Gandhi

Chartered Accountant

44442 Points Posted on 01 July 2022

1. Yes
2.No you can't , either you go for composite or normal for both .

pavan prabhas

96 Points Posted on 01 July 2022

Composite tax is applicable on business basis not for current accounts and as per the act if more than one business vertical are there and different tax scheme for different verticles are not allowed.

ramya s

25 Points Posted on 02 July 2022

Thanks a lot Rashmi and Pavanji.

1> 5Cr is the limit for composite tax...is it going to change in future?

2>What is the impact if we change from normal to Composite tax and vice versa .

currently we have normal current account. But competitors are giving heavy discount rate...so we are thinking of going for composite but we are not aware of the impact in future?