query: transfer of assets in LLP

 

Presently I am converting a PVT Co. in to llp.
the company has assets worth 5cr & authorized capital is 4,00,000/-

as per new section 47(xiib)
the company fulfills all the 6 conditions.
so according to this the capital gain on conversion from company to LLP should be taxfree.

but one of my learned friend told below things:

Under the provisions of LLP Act, 2008 on conversion of company into LLP, all tangible (movable or immovable) property vested in the company, shall be transferred to limited liability partnership 

Section 45 of the Income Tax Act provides that any profit or gains arising on transfer of capital asset shall be chargeable to capital gain. 

no exemption is granted to conversion of company into LLP. Therefore till any such amendment in Income Tax Act, the transfer of all assets (movable assets) and liabilities of the Company will be made at their Book Value at the time of conversion to avoid any Capital Gain Tax. In respect of immovable property, as per section 50C of the Income Tax Act, in case of transfer of land , building or both, the value of asset calculated for the purpose of making the payment of stamp duty ,shall be taken to be value of asset and therefore any difference in the book value and valuation as per stamp duty, shall be liable for capital gain


Please guide me further in this matter as to avoid capital gain.
Replies (3)

Hi Hemang,

The Sec 47 (xiiib) has clearly specified the conditions and if you can full fill all the 6 conditions, the transfer is not cosidered as transfer at all. Please also note that Sec 47 over rides Sec 45 with specific wordings in Sec 47 which starts as " Nothing contained in Sec 45 shall apply to the following Transfers"

So According to me, wheh the transfer is not considered as transfer at all, there is no question of capital gain and tax

I hope the above answer your query.

Sivakumar.K,

thx, Sivakumar.K,

I do agree with Mr K.Sivakumar , as that Section has an overriding effect on Sec 45.

thanks


Deepak Bhardwaj

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
09 September 2026
Chartered Accountant

Aviv Global Private Limited

Ahmedabad

CA

View Details
Company
ARTICLESHIP 21 September 2026
CA Article Assistant

KK & Company Chartered Accountant

Pune

CA Inter

View Details
Company
09 September 2026
Semi Qualified CA / CA Inter - 2 Groups Cleared

Getmyca Consultant Pvt Ltd

New Delhi

CA Inter

View Details
Company
ARTICLESHIP 30 September 2026
CA Article Assistant

CA Suraj Garg & Associates

New Delhi

CA Final

View Details
Company
Featured 21 September 2026
Consultant - Reporting

Finrep Advisors LLP

Mumbai

CA

View Details
Company
22 September 2026
Account Assistant

Chirag P Shah & Co. Chartered Accountant

Pune

B.Com

View Details
Company
ARTICLESHIP 28 September 2026
Junior Accountant

J S P M & Associates LLP

Pune

B.Com

View Details
Company
08 September 2026
Semi-Qualified Assitant

Subrahmanyam & Sivudu CA Firm

Hyderabad

CA Inter

View Details