IT Capital Gain doubt?

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Hi friends,

I have doubt in the Partnership firm accounts if partner is retired with lets say Rs.2 Lakhs.. his capital was only Rs. 1 lakh... what is the treatment for the excess recieved amount....in the hands of partner and in the books of firm....

thanks in advance..

 

Replies (2)

hi

Rs 1Lac is royalty from 2lacs. &  is taxable under the head business & profession as its income from being retiring from the business and thats why under the head business & profession and not under the head other sources.

TDS provisions are also applicable.

 

Thanks for the reply...

royalty means for using anyting or any capital asset ...it is nothing but lease rental isn't it ??? let me know if i am wrong?  if the income is taxable under business or profession....he is receiving capital in nature which is given by existing partners....

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