https://www.taxtmi.com/forum/issue?id=116241 A proprietor wishing to transfer business capital to his daughter may transfer cash or gift inventory; gifts to a daughter are exempt from tax. A sale of inventory to the partnership makes the proprietor a creditor and does not convert the item into the daughter's capital; sale at profit yields taxable profit to the proprietor. To make the inventory capital of the daughter, reverse the sale and execute a registered gift deed enabling the daughter to introduce the inventory as capital in kind, with the proprietor recording drawings. Alternatively assign the receivable arising from the sale to the daughter by gift deed. en-us Mon, 27 Apr 2020 14:36:41 +0530 Thu, 23 Jan 2025 15:54:46 +0530 TaxTMI RSS Generator https://www.taxtmi.com/forum/issue?id=116241 A proprietor wishing to transfer business capital to his daughter may transfer cash or gift inventory; gifts to a daughter are exempt from tax. A sale of inventory to the partnership makes the proprietor a creditor and does not convert the item into the daughter's capital; sale at profit yields taxable profit to the proprietor. To make the inventory capital of the daughter, reverse the sale and execute a registered gift deed enabling the daughter to introduce the inventory as capital in kind, with the proprietor recording drawings. Alternatively assign the receivable arising from the sale to the daughter by gift deed. Discussion-Forum Income Tax Mon, 27 Apr 2020 14:36:41 +0530 https://www.taxtmi.com/forum/issue?id=116241