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visu iyer (mentor)     25 May 2021

Partnership business income

A partnership firm where two were partners,

both invest their money in the firm and the firm is in trading at stock market and making profit. 


-  the profit to the firm will be capital gain and

- share of profit from the business is business profit or loss

Is this is correct.

Veterans, please guide and advise.

 8 Replies

veerendar singh

veerendar singh (tax consultant)     25 May 2021

Yes your interpretation is right
1 Like
Sivaramaraju G

Sivaramaraju G (Learner)     25 May 2021

It could be capital gain/loss or PGBP.
Depends on how frequently you are doing transaction of particular stock.

Sourav (Student)     25 May 2021

Yes you're correct
visu iyer

visu iyer (mentor)     25 May 2021

can a partnership firm be shareholderl of a company;  and hold shares in the name of the partnership firm.?

I still have doubt..!!

Sivaramaraju G

Sivaramaraju G (Learner)     25 May 2021

Actually can't because partnership firm doesn't have separate legal entity like company. so it can't be a share holder.
after seeing your second question I got the same doubt how partnership firm bought shares on it's name??
I think they must be purchasing shares on the name of individual partner.
veerendar singh

veerendar singh (tax consultant)     25 May 2021

A firm can hold shares in its name.
firm can have properties registered in its name
firm can even register motor vehicles in its name.
1 Like
CA Puja Sharma

CA Puja Sharma (Chartered Accountant)     25 May 2021

You can treat the trading made at the stock market as PGBP on the basis of the frequency of the transactions

veerendar singh

veerendar singh (tax consultant)     26 May 2021

He never asked whether or not share trading is business for the firm.

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