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Query on Land Transfer to LLP as Capital Contribution

Tax queries 1970 views 2 replies

One Partner has transfered the land into his LLP as a Capital Contribution at Value of Rs. 70 Lacs., But on the Same day Market Value of Same land was Rs. 4 Crore.

What will be taxbility on this?

Please guide.

Replies (2)

Dear Ravindra,

Sec 45(3) -

 The profits or gains arising from the transfer of a capital asset by a person to a firm or other association of persons or body of individuals (not being a company or a co-operative society) in which he is or becomes a partner or member, by way of capital contribution or otherwise, shall be chargeable to tax as his income of the previous year in which such transfer takes place and, for the purposes of section 48, the amount recorded in the books of account of the firm, association or body as the value of the capital asset shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of the capital asset.

Sec 2(23)(i) "firm” shall have the meaning assigned to it in the Indian Partnership Act, 1932 (9 of 1932), and shall include a limited liability partnership  as defined in the Limited Liability Partnership Act, 2008 (6 of 2009

Thanks


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