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Businesses undergoing partnership restructuring, dissolution, or reconstitution may have a new compliance requirement to watch out for under the Income-tax Act, 2025. Prescribed under Rule 50 of the Income-tax Rules, Form No. 27 has been introduced to report the amount attributed to capital assets
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FAQ :
Form No. 27 is a compliance form introduced under the Income-tax Act, 2025, requiring specified entities to report the amount attributed to capital assets remaining with the entity after dissolution or reconstitution, particularly when income becomes taxable under Section 67(10).
Every specified entity where a specified person receives capital assets, stock-in-trade, or both, in connection with the dissolution or reconstitution of the entity during the tax year, must file Form No. 27.
Yes, filing Form No. 27 is mandatory if income becomes taxable under Section 67(10) and attribution of income to capital assets is required under Rule 50.
Form No. 27 must be furnished along with the return of income (ITR) for the relevant tax year in which the dissolution or reconstitution takes place and assets are transferred.
Yes, a valuation report issued by a registered valuer is mandatory and must be uploaded when filing Form No. 27, as it supports the attribution of income to capital assets.
No, Form No. 27 can only be furnished electronically through the prescribed online system.
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