TMI BlogPartnership Firms –ignored entity in matter of Income tax. Attention is desired for incentives and lower rate in a balanced manner taking into provisions for Individuals, AOP , BOI and companiesX X X X Extracts X X X X X X X X Extracts X X X X ..... Partnership Firms –ignored entity in matter of Income tax. Attention is desired for incentives and lower rate in a balanced manner taking into provisions for Individuals, AOP , BOI and companies - By: - DEV KUMAR KOTHARI - Income Tax - Dated:- 7-2-2023 - - Firms are important but Ignored entity Partnership firms including LLP are important entity in our economy. After an individual or his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proprietorship concern partnership firm and LLP are only option to many professionals to carry profession as a team of members sharing profits. Many small family businesses are also run in partnership for ease of doing business and because for family convenience proprietary concern is not found suitable. Most of partnerships are in nature of concerns of self-employed persons and their fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mily members or close relatives and friends who think for association for different interest with a check and balance within the group. Therefore, there must be fair treatment for firms in matter of taxation. When lower rates of tax are made optional to companies, co-operatives there is no reason for not extending such lower rate to tax and options to firms. A manufacturing company can avai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l low tax rate of 15% then why a similar benefit is not extended to a firm engaged in manufacturing. Number of partnership firms: In web search any information about number of firms could not be found. The tax departments must have ready information about firms having PAN. On https://www.addressadda.com/ ... there is mention as follows: There are more than 1 Lakh LLP companies reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istered in India and all details of all registered Limited Liability Partnership Firm are available on our website LLP is relatively a new form of organization. Normal partnership firms must be in large number in India although there have been changes of constitution of large number of firms into LLP and companies. Therefore, honorable FM is requested to get information and take a suit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able decision in this regard. Ignored entity: Author is describing firm , as an ignored entity or type of assessee because we do not find desired attention for them in tax laws. Old provisions are continuing without any extension of ease of doing business, compliances and lower rate of tax, concessions and options for tax regimes. Budget Speech: In the budget speech of 2023 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... honorable FM we do not find any mention about firms, LLP, partnership firms. Similar is case of budget speech of 2022 and may be in many of earlier budgets also. Only attempts have been made to make some provisions, to reduce some long term benefits availed by firms in ordinary and natural course of working as an organization of a firm. Rate of tax: Rate of tax on firms is higher @ 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0% and surcharge in case income of firm exceeds prescribed amount. There is no reduction during recent past when rate of tax on companies have been reduced. There is no basic exemption also. In proposed amendments and memorandum we find that at ten places there is mention of surcharge on income tax in case of firms where total income exceeds Rs. one crore. There is one amendment propo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed in section 189 which is consequential to new post of Joint Commissioner proposed in the Finance bill. Some mentions of firm are found in relation to computation of tax, surcharge , presumptive tax and audit etc. Therefore, there seems no change in nature of any incentive or concession or option allowed to firms. Firms may be allowed certain concessions by way of basic exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per partner or as a percentage of capital employed, concessional rate of tax in case of new firms , firms engaed in manufacturing , firms engaged in business and / or profession when its partners are self-employed persons and also where firm creates new employments. Readers are requested to send their views and suggestions. - - Scholarly articles for knowledge shari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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