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 .



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


Building A/c Dr   2000000

   To A's Capital Account 2000000

Calculate Capital Gains


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
Expenses of Transfer 0
COA 1300000
Short Term Capital  Gain/(Loss) 700000


  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 .