Chandargi B B (CA) 08 December 2009

Taxation on retirement from firm

Namaste to all,In case of partnership firm where one of the partners is retiring and one property purchased in the name of the partners with firm funds.Now,the continuing partners are getting the sale deed executed from the retiring partner.whether the sale amount mentioned in the sale deed is taxable under capital gain? if yes the cost of acquisition is original or after depreciation.

secondly,the retirement deed is to be executed in future and one of the properties is transferd to the continuing partners by sale deed prior to retirement deed.How it is assessed in the hands of retirng partner?

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D.V.RamaKrishna (Advocate) 08 December 2009

Chandargi B B,

It is not clear if in the 1st sale deed, through which all of your partners have acquired the property with the firm funds, your names have been mentioned in individual capapcity or as partners of firms.

Whatever be the case, I feel there is no need of executing and registering another sale deed by the retiring partner in favour of remaining partners but it is enough if the retiring partner executes and registers a relinquishment deed in favour of hte remaining partners.

With regard to taxation aspect, your query will be answered in a short period.

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Chandargi B B (CA) 08 December 2009

Sir,It is purchased in the capacity partners only.