In this case

the Amount recorded in books will be treated as full value of consideration

and not the fair market value.

 

Transfer of capital asset by a Partner to partnership firm  - Special Cases

 

Note :-

Similar will be the case on Transfer of capital asset by a Member to AOP / BOI .

 

Q1

Mr A purchased a Building for Rs 13 lacs on 10 July 2013
Later he started a partnership with B called AB & Co and introduced building as his capital contribution on 1 Sep 2015
Fair Market value was Rs 16 lacs as on that date
However,partnership firm booked it at 20 lacs by passing entry

01/09/2015

Building A/c Dr   2000000

   To A's Capital Account 2000000

Calculate Capital Gains

-a-


In this case,Full Value of Consideration will be 20 lacs and not 16 lacs

Period of holding from 10 July 2013 to 1 September 2015 is less than 3 years
Hence it is STCG
No indexation wil be done

Particulars Amt
Full Value of Consideration 2000000
Less  
Expenses of Transfer 0
COA 1300000
COI 0
Short Term Capital  Gain/(Loss) 700000

-ea-

  1. Income Tax
  2. Income from Capital Gains
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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 6 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
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