| Question And Answer | |
|---|---|
| Subject: | capital asset given to partner |
| Category: | Income-Tax |
| Querist: | BKS |
| Answered by: | Law Intern |
| Tags: | Partnership, Section 9B |
| Date: | September 11, 2025 |
whether section 9B will apply of section 45[4] ?
what is the distinction ?
U/s 9B, the capital asset given to a partner is taxable in the hands of the firm during reconstitution and dissolution.
U/s 45(4), the excess benefit i.e. money or FMV of capital asset over capital account balance) during reconstitution is taxable.
The distinction between s. 9B and s. 45(4) is that s. 9B applies to both while s. 45(4) applies only to reconstitution. Also, s. 45(4) applies to capital assets/money while s. 9B applies to capital assets and stock.
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