TaxTMI 
TaxTMI 
A partner at the time of retirement receives some amount over and above his credit balances. There are quite a few decisions that excess amount received is not subject to Capital Gain tax. My query is whether such excess amount can be brought to tax by the dept. u/s 56.
Applicability of Sec.56
25 Nov 2020 
1 Reply 
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Income from Other Sources may apply to excess retirement payments to partners as taxable other income
Whether an amount paid to a retiring partner in excess of his capital account balances is capital or taxable under the head of income from other sources is the central question; the adviser replies that such excess may be treated as other income for income tax purposes, changing its tax head from capital receipt to taxable miscellaneous income. (AI Summary)
Whether an amount paid to a retiring partner in excess of his capital account balances is capital or taxable under the head of income from other sources is the central question; the adviser replies that such excess may be treated as other income for income tax purposes, changing its tax head from capital receipt to taxable miscellaneous income. (AI Summary)