Follow Our FB Page << CircleMedia.in >> for Daily Laughter. We Post Funny, Viral, Comedy Videos, Memes, Vines...


There are three partners in a partnership firm. The firm
has office premises in the name of firm. Depreciation on
this asset is charged every in the books of the firm. Now
after depreciation the book value of this assets has become
Rs. 1000. Whereas the market vakue of this premises id Rs.
10 crorer. To bring this property at MV the partners
revalued this premised at Rs. 8 crorers in the books of the
firm and accordingly credited partner's capital account in
their profit sharing ratio. My questions are as under.
What is the income tax liability of the firm on revaluation?
What is the income tax liability of partner of each partner
on revaluation and credit to his capital account.
In future whether depreciation to the firm is allowed on
revalued amount under the income tax act.
What happens to the tax liability if one partner withdraw
his entire capital from the firm which includes credit on
revaluation of office premises?
When partners can withdraw out of their credit balance in
their capital account without attracting any tax liability
either by the firm or by partner?
What happens if one partner retires and he gets amount
equal to his capital account which inclides credit on
account of revaluation? is there any tax liability to the
retiring partner?



There are three partners in a partnership firm. The firm has office premises in the name of firm. ..

Answer / engineer

No IT for firm. Only capital increased, not profits.
No depreciation is allowed as no purchase of asset has taken place.
Partner has to pay income tax on the withdrawn capital depending on type of asset. If it is building etc there are indexation and long term capital gain exemption. But otherwise, by withdrawing the capital the asset has been sold to other 2 partners and a profit has been made and therefore liable to IT as rules of IT.
When the firm is dissolved and capital is taken back by the partners, there will be no IT.
Retirement causes payment of income tax.
these are my understanding. CA will answer this better

Is This Answer Correct ?    1 Yes 5 No

Post New Answer

More Law AllOther Interview Questions

Where does the state have the right to violate privacy?

0 Answers  


what is your proofreading experience?

0 Answers  


In calculation of gratuity, no of years of service:? if an employee worked for 3 year in one unit of the company and 2 year in abroad under the same company, and finally retrun back to india, he resigned. what is the number of years in service.? please reply me?

1 Answers  


explain the NRI Accounts available for non resident indians with relative benefits: which account is most appropriate for the NRI.

0 Answers  


Should the state have the right to violate our privacy?

0 Answers  






what are your views on equal opportunities?

1 Answers  


What is Excice Duty? where is used of excice duty ?

4 Answers  


How much you will prepare on the files for trial do you do?

0 Answers  


What is the retirement age of prime minister of india??

3 Answers  


what is the procedure for changes in director's details of company ??.is form 32 appropriate for that .??

0 Answers  


i have comleted my degree in law and i have to face a interview in pnb for a clerk post. i want to know what should i say if they ask me why do you want to join banking sector after doing llb.

0 Answers   Punjab National Bank,


what will be the Journal entry for, Goods sold to james on credit for rupees 20,000.?

0 Answers  






Categories