Let's assume there is a proprietor who earns 60L annually through the export of services (through royalty income by IP rights for technical books, and few others)
Now he has opened a private limited company, and he plans to receive all income there. In such a case, is Slump Sale / BTA mandatory?
Without a slump sale, can Income Tax club income to hand of proprietor since there is no asset transfer, but income is transferred.
Does he have to pay stamp duty on the FMV of his IP rights?
Slump sale is not mandatory, but asset transfer is mandatory if income is to shift.
Without transferring IP, income can legally be taxed back in proprietor’s hands.
Stamp duty applies on IP transfer.
The most tax-efficient route is conversion under Section 47(xiv) or structured IP licensing.
YOGESH KAPOOR AND ASSOCIATES
New Delhi
B.Com
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