LLP- new form for auditor’s certificate about Alternate minimum tax (AMT) analysis and suggestions about newly prescribed Rule and Forms.

[C.A. DEV KUMAR KOTHARI]

Sections 115 JC, 115JD, 115JE and 115JF.

Rule 40BA and Form No. 29C

Limited Liability Partnerships (LLP)

Increasing complexities in case of LLP:

LLP was perceived a simple form of organization which would not require many procedural and legal complexities. In fact, the main purpose of introduction and promotion of LLP was to provide a fillip to partnerships with privilege of limited liability of partners. However, it appears that legal complexities are on increase for compliance by LLP.

AMT on LLP:

In case of partnership firms there is no minimum alternate tax. However, LLPs have been burdened with AMT with increased procedural requirements which will entail administrative expenses.

Vide newly inserted chapter XII-BA consisting of Sections 115 JC, 115JD, 115JE and 115JF.  alternate minimum tax will be levied on LLP with effect from 01.04.2012 that is assessment year 2012-13. The first previous year for which will end on 31.03.2012.

These sections provide for manner for computation of base of income on which AMT shall be computed and also tax credit for AMT against normal tax payable in future, if it exceeds AMT for that year. The eligible period for such credit has been fixed as ten years.

Prescribed report for AMT:

As in case of companies liable to MAT , LLP’s have also to file a report for computation of AMT. Recently Income Tax Rules have been amended in this regard  vide the

NOTIFICATION NO. 60/2011 dated 1st December, 2011