Capital Gains on Transfer of Assets by a Partnership Firm to its Partners in India – Fishing in Troubled Waters

Sridhar Vemulapati – Symbiosis International (Deemed University), Symbiosis Law School, Survey No. 227, Plot No. 11, Rohan Mithila, Opp. Pune Airport, Symbiosis Road, Viman Nagar, Pune – 411014, Maharashtra, India

Bindu Ronald – Symbiosis International (Deemed University), Symbiosis Centre for Advanced Legal Studies and Re-search, Symbiosis Law School, Pune, Survey No. 227, Plot No.11, Rohan Mithila, Opp. Pune Airport, Sym-biosis Road, Viman Nagar, Pune – 411014, Maharashtra, India

Abstract: The Finance Act, 2021 introduced section 9B to the Income Tax Act, 1961 and substituted (4) 45(4) of the Act. These sections deal with the transfer of money, capital assets and other assets from a partnership firm to a partner. The amendments are stated to be made to clear the uncertainty that exists in the law. This article explores the history of taxation of partnership firms and their partners under the Indian Tax law and examines whether the said amendments meet the stated objective. The authors argue that the amendments have widened the uncertainty rather than minimise it let alone erase it. In the opinion of the authors, the entire amendment process is flawed, and the situation causes vexatious litigation of alarming proportions. Similar tax provisions in the USA, the UK and Australia, are compared.

10th International Scientific Conference ERAZ 2024 – Conference Proceedings: KNOWLEDGE BASED SUSTAINABLE DEVELOPMENT,  hybrid – online, virtually and in person, Lisbon, Portugal, June 6, 2024

ERAZ Conference Proceedings published by: Association of Economists and Managers of the Balkans – Belgrade, Serbia

ERAZ conference partners: Faculty of Logistics, University of Maribor, Maribor (Slovenia); University of National and World Economy – UNWE, Sofia (Bulgaria); Center for Political Research and Documentation (KEPET), Research Laboratory of the Department of Political Science of University of Crete (Greece); Institute of Public Finance – Zagreb (Croatia); Faculty of Tourism and Hospitality Ohrid, University of St. Kliment Ohridski from Bitola (North Macedonia)

ERAZ Conference 2024 Conference Proceedings: ISBN 978-86-80194-86-8, ISSN 2683-5568,

DOI: https://doi.org/10.31410/ERAZ.2024

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