1. Welcome to

2. Pune Branch of WIRC of The Institute of Chartered Accountants of India

3. Residential Refresher Course Taxation of Partnership Firms
CA CHANDRASHEKHAR V. CHITALE

4. Taxation of Partnerships
Partnership – Meaning
Assessment
Business Income
Capital Gains
Organizational Changes
Way Forward 1

6. Partnership – Meaning

7. Partnership – Meaning
Two friends studying in a secondary school decide to sale crackers in Diwali holidays and share profits equally.
They earn profit of Rs lac
How the profits will be assessed? 1

8. Partnership – Meaning Section 2 (31) (iv) Section 2(23): Firm
LLP 1

9. Partnership – Meaning Partnership Deed
Registration under the Indian Partnership Act, 1932?
Stamp Paper? 1

10. Partnership Business
Lawful Business
Illegal Act 1

11. Minor Can a ‘minor’ be a partner? Signature on the Deed
Signature on the certified copy
Assessment of remuneration
Assessment of interest 1

12. HUF Can a ‘HUF’ be a partner? Why to admit HUF in firm?
Partnership of Two HUFs
Partnership of HUF and coparcener
Assessment of remuneration
Assessment of interest 1

13. Partnership Issues Can a ‘Firm’ be a partner?
How to admit ‘Firm’ as a partner?
Two Firms with same partners
Partnership of Two Firms
Joint Development Agreement and Partnership 1

15. Assessment

16. Assessment
Partnership firm is constituted on Remuneration is paid to one working partner and to a HUF partner. Interest to all the 15% p.a. It wants to furnish return of income.
What procedure firm should follow?
What precautions firm should take in income computation? 1

17. Assessment
Section 184
E- filing of Return
File of Return Papers 1

18. Registration Section 184 Instrument of Partnership
Signature on the Certified Copy
Sign by a ‘minor’
Section 40(b) 1

19. Change in Constitution
Partnership firm is constituted on It sustained loss of Rs. 3 lacs for A. Y One partner with 30% share retired and the firm continued by the remaining two partners. It wants to furnish return of income.
What procedure firm should follow?
What precautions firm should take in income computation? 1

20. Change in Constitution
Section 185
Section 78 (1) 1

21. Change in Constitution
Partnership firm is dissolved on It has property of Rs. 50 lac (FMV Rs. 80 lac) and stock of Rs. 12 lac (FMV Rs. 20 lac). The business was taken over and continued by one partner as a proprietary entity.
What procedure firm should follow?
What precautions firm should take in income computation? 1

22. Change in Constitution
Section 188
Section 45
ICDS 2
Supreme Court judgments 1

23. Business Income
ICDS 2
24. In case of dissolution of a partnership firm or association of person or body of individuals, notwithstanding whether business is discontinued or not, the inventory on the date of dissolution shall be valued at the net realisable value. 1

24. Business Income A.L.A. Firm 102 ITR 622 (SC)
Sakthi Trading Co vs CIT118 TAXMAN 301 (SC) 1

25. Business Income

26. Business Income Business Income Remuneration Interest
Estimated Income Scheme 1

27. Business Income
Mr. Apple is receiving salary from employment amounting to Rs. 20 lacs. He has invested in capital of his Son’s firm Rs. 50 lacs. Should firm pay interest to him?
Mr. Bell has borrowed Rs. 50 lacs to invest in firm’s capital Rs. 50 lacs. Should firm pay interest to him? 1

28. Business Income
M/s. Goa Cashew Company for F.Y has a turnover of Rs. 80 lacs.
Accounts reflect Net Profit of Rs. 20 lacs.
For reducing income should it pay interest and remuneration to partners?
Reporting of the entire income is mandatory for the firm? 1

29. Capital Gain

30. Capital Gain Section 45 (1) Section 45 (3) Section 45 (4) Section 54 D
Section 54 EC
Section 54 G
Section 54 GA 1

31. Capital Gain Elora Constructions admits a partner Deva.
Deva enters into a development agreement with the firm for a plot of land he owns and receives four flats (FMV of flats Rs. 1 cr.)
How to ascertain capital gains tax?
Will answer change, where FMV of land is 1.20 cr.? 1

32. Taxation Baga Constructions admits a partner Deva.
Deva enters into a development agreement with the firm for a plot of land he owns and receives four flats (FMV of flats Rs. 1 cr.)
Can Deva save capital gains tax as he is acquiring 4 adjoining flats?
Is there any other way to save tax? 1

33. Loss

34. Loss
Return
Section 78 (1)
Section 32 (2) 1

35. Organizational Changes

36. Organizational Changes
Conversion into:
LLP
Company
Proprietorship 1

37. Organizational Changes
Tax Liability
Section 188A
Section 189 1

38. Way Forward

39. Way Forward Risk Participants Tax Advantages Combination of Entities
Professionals 1

40. it was a C. V. Chitale & Co. presentation
Thank You!
it was a C. V. Chitale & Co. presentation