TAXABILITY OF RETIREMENT AND ADMISSION OF PARTNER AS PER INCOME TAX ACT, 1961

Avigyan De (3 Points)

29 July 2021  

Sir,

If in a partnership firm, a partner is retiring from firm due to his personal reason and in his place a relative of that partner is joining the firm, what will be the income tax treatment if the incoming partner does not bring in capital and retiring partner is not receiving his share of capital.

 

Is there any capital gain tax arising due to such transfer? Please guide me in light of Partnership Act, and Income Tax Act, 1961.

 

Thanking you