| Question And Answer | |
|---|---|
| Subject: | LLP income tax |
| Category: | Income-Tax |
| Querist: | rajesh |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | dissolution of firm, Limited liability partnership, LLP |
| Date: | May 20, 2022 |
In a LLP partners capital is at Rs 10 lacs and reserves and surplus are of Rs 100 lacs. on dissolution of partnership, partners will get 110 lacs .
whether 100 lacs received on dissolution is taxable in the hands of partner.
note reserves and surplus created from share premium account , and stand as reserves in LLP on conversion from company to LLP
As we understand, as per the formula given under section 45(4) of the Income-tax Act, the capital account may be represented in any manner. Therefore, the ‘reserves and surplus’ forms a part of the Capital of the Partner. Hence, the sum of Rs. 100 lakhs should not attract section 45(4) of the Act.
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