Question ID : 28555

capital gains

As per section 45(3), an individual who brings in his personal asset as capital contribution to the firm will be liable to Capital Gain Tax on value recorded in the books of the firm. In an example A contributes his individual land worth 1Crore at agreed value of 50Lacs. Invariably, the partnership deed is also registered with “sub registrar” paying registration fee on “guideline value” (in this case on 1Crore), My questions are 1. Whether section 50C is applicable to “A” and is he to pay Capital Gain tax on 1crore and not 50lacs as provided under section 45(3) 2. Whether provision of section 56(x) is attracted and the firm has to pay Tax of 50L (1crore minus 50lacs) treating the same as income from other sources.

posted by Ethirajan on Apr 10 2018 12:00AM