{"id":32517,"date":"2026-07-26T15:53:03","date_gmt":"2026-07-26T10:23:03","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=32517"},"modified":"2026-07-26T16:04:01","modified_gmt":"2026-07-26T10:34:01","slug":"overview-taxation-of-firms-llps-in-india","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/","title":{"rendered":"Overview Taxation of Firms &#038; LLPs in India"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a67692d5db7a\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a67692d5db7a\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#Overview_Taxation_of_Firms_LLPs_in_India\" title=\"Overview Taxation of Firms &amp; LLPs in India \">Overview Taxation of Firms &amp; LLPs in India <\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#Basic_Tax_Rate_of_Firms_and_LLPs\" title=\" Basic Tax Rate of Firms and LLPs\"> Basic Tax Rate of Firms and LLPs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#FirmLimited_Liability_Partnerships_vs_Company\" title=\" Firm\/Limited Liability Partnerships vs Company\"> Firm\/Limited Liability Partnerships vs Company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#Comparison_with_Companies\" title=\"Comparison with Companies\">Comparison with Companies<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#Section_9B_Section_454\" title=\" Section 9B &amp; Section 45(4)\"> Section 9B &amp; Section 45(4)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#Taxation_on_Retirement_of_Partner\" title=\" Taxation on Retirement of Partner\"> Taxation on Retirement of Partner<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#Avoidance_of_Double_Taxation_%E2%80%93_Section_48iii\" title=\" Avoidance of Double Taxation \u2013 Section 48(iii)\"> Avoidance of Double Taxation \u2013 Section 48(iii)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#Conversion_of_FirmLLP_into_Company_Section_47xiii\" title=\" Conversion of Firm\/LLP into Company (Section 47(xiii)) \"> Conversion of Firm\/LLP into Company (Section 47(xiii)) <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#Depreciation_and_Cost_Step-Up_after_Conversion\" title=\" Depreciation and Cost Step-Up after Conversion\"> Depreciation and Cost Step-Up after Conversion<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#Merger_of_Limited_Liability_Partnerships\" title=\" Merger of Limited Liability Partnerships \"> Merger of Limited Liability Partnerships <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#Key_Takeaways\" title=\"Key Takeaways\">Key Takeaways<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#Latest_Updates_on_Income_Tax_for_Firms_LLPs_AY_2025-26\" title=\"Latest Updates on Income Tax for Firms &amp; LLPs (AY 2025-26)\">Latest Updates on Income Tax for Firms &amp; LLPs (AY 2025-26)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#Tax_Structure_for_AY_2025-26\" title=\"Tax Structure for AY 2025-26\">Tax Structure for AY 2025-26<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#Old_Regime_vs_New_Regime\" title=\"Old Regime vs New Regime\">Old Regime vs New Regime<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#Major_Deductions_Available_to_Firms_LLPs\" title=\"Major Deductions Available to Firms &amp; LLPs\">Major Deductions Available to Firms &amp; LLPs<\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#Donations_%E2%80%93_Section_80G\" title=\"Donations \u2013 Section 80G\">Donations \u2013 Section 80G<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#Donations_for_Scientific_Research_and_Rural_Development_%E2%80%93_Section_80GGA\" title=\"Donations for Scientific Research and Rural Development \u2013 Section 80GGA\">Donations for Scientific Research and Rural Development \u2013 Section 80GGA<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#Political_Contributions_%E2%80%93_Section_80GGB\" title=\"Political Contributions \u2013 Section 80GGB\">Political Contributions \u2013 Section 80GGB<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#Infrastructure_Undertakings_%E2%80%93_Section_80IA\" title=\"Infrastructure Undertakings \u2013 Section 80IA\">Infrastructure Undertakings \u2013 Section 80IA<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#Special_Economic_Zones_SEZ_%E2%80%93_Section_80IAB\" title=\"Special Economic Zones (SEZ) \u2013 Section 80IAB\">Special Economic Zones (SEZ) \u2013 Section 80IAB<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#Eligible_Startups_%E2%80%93_Section_80IAC\" title=\"Eligible Startups \u2013 Section 80IAC\">Eligible Startups \u2013 Section 80IAC<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#Industrial_Undertakings_%E2%80%93_Section_80IB\" title=\"Industrial Undertakings \u2013 Section 80IB\">Industrial Undertakings \u2013 Section 80IB<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#Housing_Projects_%E2%80%93_Section_80IBA\" title=\"Housing Projects \u2013 Section 80IBA\">Housing Projects \u2013 Section 80IBA<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#Regional_Development_%E2%80%93_Section_80IC\" title=\"Regional Development \u2013 Section 80IC\">Regional Development \u2013 Section 80IC<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#North_Eastern_States_%E2%80%93_Section_80IE\" title=\"North Eastern States \u2013 Section 80IE\">North Eastern States \u2013 Section 80IE<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#Environmental_Business_%E2%80%93_Section_80JJA\" title=\"Environmental Business \u2013 Section 80JJA\">Environmental Business \u2013 Section 80JJA<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-27\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#Employment_Generation_%E2%80%93_Section_80JJAA\" title=\"Employment Generation \u2013 Section 80JJAA\">Employment Generation \u2013 Section 80JJAA<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-28\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#Offshore_Banking_IFSC_Units_%E2%80%93_Section_80LA\" title=\"Offshore Banking &amp; IFSC Units \u2013 Section 80LA\">Offshore Banking &amp; IFSC Units \u2013 Section 80LA<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-29\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#Inter-Corporate_Dividends_%E2%80%93_Section_80M\" title=\"Inter-Corporate Dividends \u2013 Section 80M\">Inter-Corporate Dividends \u2013 Section 80M<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-30\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#Producer_Companies_%E2%80%93_Section_80PA\" title=\"Producer Companies \u2013 Section 80PA\">Producer Companies \u2013 Section 80PA<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-31\" href=\"https:\/\/carajput.com\/blog\/overview-taxation-of-firms-llps-in-india\/#Important_Practical_Note\" title=\"Important Practical Note\">Important Practical Note<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-30490\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/11\/AI-.png\" alt=\"\" width=\"1007\" height=\"498\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/11\/AI-.png 1007w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/11\/AI--300x148.png 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/11\/AI--768x380.png 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/11\/AI--800x396.png 800w\" sizes=\"(max-width: 1007px) 100vw, 1007px\" \/><\/h2>\n<h2><span class=\"ez-toc-section\" id=\"Overview_Taxation_of_Firms_LLPs_in_India\"><\/span><span style=\"color: #000080;\"><strong>Overview Taxation of Firms &amp; LLPs in India <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Key aspects of taxation of partnership firms and limited liability partnerships are as follows.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Basic_Tax_Rate_of_Firms_and_LLPs\"><\/span><span style=\"color: #000080;\"><strong> Basic Tax Rate of Firms and LLPs<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"padding-left: 40px;\">Partnership firms and limited liability partnerships are taxed at a flat rate of 30%. After surcharge and health &amp; education cess, the effective tax rate may go up to approximately 34.94%. Unlike companies, limited liability partnerships and firms enjoy single-level taxation. The share of profit received by partners is generally exempt in their hands u\/s 10(2A).<\/p>\n<h3><span class=\"ez-toc-section\" id=\"FirmLimited_Liability_Partnerships_vs_Company\"><\/span><span style=\"color: #000080;\"><strong> Firm\/Limited Liability Partnerships vs Company<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"padding-left: 40px;\">Advantages of Limited Liability Partnerships\/Firm No dividend taxation, No deemed dividend provisions, Lower compliance burden, Profit distributed to partners is generally tax-free. And Interest and remuneration paid to working partners are deductible subject to Section 40(b) conditions.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Comparison_with_Companies\"><\/span><span style=\"color: #000080;\"><strong>Comparison with Companies<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-32518\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/07\/key-diff-llp-.png\" alt=\"Comparison with Companies\" width=\"922\" height=\"462\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/07\/key-diff-llp-.png 922w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/07\/key-diff-llp--300x150.png 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/07\/key-diff-llp--768x385.png 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/07\/key-diff-llp--800x401.png 800w\" sizes=\"(max-width: 922px) 100vw, 922px\" \/><\/p>\n<table width=\"641\">\n<tbody>\n<tr>\n<td><strong>Particulars<\/strong><\/td>\n<td><strong>Firm \/ Limited Liability Partnerships<\/strong><\/td>\n<td><strong>Company<\/strong><\/td>\n<\/tr>\n<tr>\n<td><strong>T<\/strong>ax on profits<\/td>\n<td>34.94% (effective)<\/td>\n<td>17.16%\u201335.88% depending on regime<\/td>\n<\/tr>\n<tr>\n<td>Tax on distribution<\/td>\n<td>Nil (profit share exempt)<\/td>\n<td>Dividend taxable<\/td>\n<\/tr>\n<tr>\n<td>Compliance<\/td>\n<td>Simpler<\/td>\n<td>More complex<\/td>\n<\/tr>\n<tr>\n<td>Deemed dividend<\/td>\n<td>Not applicable<\/td>\n<td>Applicable<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span style=\"color: #000080;\"><strong>\u00a0<\/strong><strong>Partnership Firms vs. Limited Liability Partnerships<\/strong><\/span><\/p>\n<table width=\"676\">\n<tbody>\n<tr>\n<td><strong>Particulars<\/strong><\/td>\n<td><strong>Partnership Firm<\/strong><\/td>\n<td><strong>Limited Liability Partnerships<\/strong><\/td>\n<\/tr>\n<tr>\n<td>Separate legal entity<\/td>\n<td>No<\/td>\n<td>Yes<\/td>\n<\/tr>\n<tr>\n<td>Limited liability<\/td>\n<td>No<\/td>\n<td>Yes<\/td>\n<\/tr>\n<tr>\n<td>Perpetual succession<\/td>\n<td>No<\/td>\n<td>Yes<\/td>\n<\/tr>\n<tr>\n<td>Maximum partners<\/td>\n<td>50<\/td>\n<td>No limit<\/td>\n<\/tr>\n<tr>\n<td>Tax rate<\/td>\n<td>30%<\/td>\n<td>30%<\/td>\n<\/tr>\n<tr>\n<td>Presumptive taxation<\/td>\n<td>Available<\/td>\n<td>Not available<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span style=\"color: #000080;\"><strong> Capital Contribution by Partner \u2013 Section 45(3)<\/strong><\/span><\/p>\n<ul>\n<li>When a partner contributes a capital asset (land, building, shares, etc.) to a firm or limited liability partnership as capital contribution The transaction is treated as a transfer in the hands of the partner, Capital gains are taxable in the partner&#8217;s hands, The consideration is deemed to be the value recorded in the books of the firm\/limited liability partnership, and Tax arises in the year the asset is introduced into the firm.<\/li>\n<li>Example : Mr. A contributes land: Cost of land = INR 10 lakh, Value recorded in LLP books = INR 40 lakh and Capital Gain = INR 40 lakh \u2013 INR 10 lakh = INR 30 lakh. Taxable in the hands of Mr. A.<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><strong> Section 56(2)(x) Implications<\/strong><\/span><\/p>\n<p style=\"padding-left: 40px;\">Where a limited liability partnership receives property or shares from a partner at a value lower than fair market value, taxability u\/s 56(2)(x) may be examined, and commercial justification and valuation become important. And partnership interest itself is generally not regarded as &#8220;property&#8221; for the partner.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Section_9B_Section_454\"><\/span><span style=\"color: #000080;\"><strong> Section 9B &amp; Section 45(4)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"padding-left: 40px;\">These provisions apply when a partner receives money, assets, or stock from a firm on Retirement, Reconstitution, Change in profit-sharing ratio, and dissolution.<\/p>\n<p style=\"padding-left: 40px;\"><strong>Section 9B :\u00a0<\/strong>When a firm transfers capital assets or stock-in-trade to a partner, the firm is deemed to have transferred such assets at Fair Market Value (FMV). Tax is paid by the firm.<\/p>\n<p style=\"padding-left: 40px;\">Section 45(4) : Applies when a partner receives money or capital assets on reconstitution of the firm. The gain is calculated as A = B + C \u2212 D<\/p>\n<p><strong>Where:<\/strong><\/p>\n<ul>\n<li>A = Capital gain taxable in firm&#8217;s hands<\/li>\n<li>B = Money received by partner<\/li>\n<li>C = FMV of capital assets received<\/li>\n<li>D = Capital account balance (excluding revaluation\/goodwill)<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Taxation_on_Retirement_of_Partner\"><\/span><span style=\"color: #000080;\"><strong> Taxation on Retirement of Partner<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"padding-left: 40px;\">Earlier, retirement proceeds were generally not taxable due to judicial precedents such as Mohanbhai Pamabhai. After the introduction of Sections 9B and 45(4):<\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Payments to retiring partners may trigger taxation.<\/li>\n<li>Tax is imposed in the hands of the firm.<\/li>\n<li>Both cash and asset distributions are covered.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Avoidance_of_Double_Taxation_%E2%80%93_Section_48iii\"><\/span><span style=\"color: #000080;\"><strong> Avoidance of Double Taxation \u2013 Section 48(iii)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"padding-left: 40px;\">Sections 9B and 45(4) can create a double taxation situation. To address this: Section 48(iii) provides relief. How It Works Suppose: Firm pays tax under Section 45(4) today. And Remaining assets are sold after several years. The amount already subjected to tax under Section 45(4) is attributed to the remaining assets. This amount is allowed as deduction during future sale. To prevent double taxation arising under Sections 9B and 45(4) : Tax paid under Section 45(4) is attributed to remaining capital assets and Such attributed amount can be deducted when those assets are eventually sold by the firm. Rule 8AB provides the attribution mechanism.<\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Benefit : Prevents taxation of the same appreciation twice.<\/li>\n<li>Rule 8AB : Rule 8AB provides the detailed mechanism for allocation of such gains among remaining assets.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Conversion_of_FirmLLP_into_Company_Section_47xiii\"><\/span><span style=\"color: #000080;\"><strong> Conversion of Firm\/LLP into Company (Section 47(xiii)) <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"padding-left: 40px;\">The Income Tax Act allows tax-neutral conversion. Section 47(xiii) provides tax-neutral conversion of a firm into a company if conditions are satisfied. if specified conditions are fulfilled. Conditions<\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Transfer of All Assets &amp; Liabilities: Entire business of Firm\/LLP must transfer to company.<\/li>\n<li>Shareholding Based on Capital Accounts: Partners should become shareholders based on their capital balances.<\/li>\n<li>No Consideration Other Than Shares: Partners should receive only shares. and No cash payment is permitted.<\/li>\n<li>50% Voting Power for 5 Years: Former partners collectively must hold at least 50% voting rights for five years.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>Consequence of Violation: If any condition is violated like Exemption is withdrawn, Capital gains become taxable in year of violation.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Depreciation_and_Cost_Step-Up_after_Conversion\"><\/span><span style=\"color: #000080;\"><strong> Depreciation and Cost Step-Up after Conversion<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-32519\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/07\/cost-dept-.png\" alt=\"Depreciation and Cost Step-Up after Conversion\" width=\"681\" height=\"342\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/07\/cost-dept-.png 681w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/07\/cost-dept--300x151.png 300w\" sizes=\"(max-width: 681px) 100vw, 681px\" \/><\/p>\n<p style=\"padding-left: 40px;\"><strong>An important issue arises after conversion. <\/strong><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Can Company Claim Depreciation on Revalued Assets? Judicial decisions have allowed depreciation on enhanced values in certain circumstances.<\/li>\n<li>Purchase Price Allocation (PPA) : Where the company acquires business assets Tangible assets may be revalued, Intangible assets may be separately identified and Depreciation can be claimed on eligible intangible assets.<\/li>\n<li>Goodwill : Following Supreme Court rulings: Goodwill is no longer eligible for depreciation.<\/li>\n<li>Where a firm converts into a company Courts have allowed depreciation on revalued assets in certain cases, Valuation-based purchase price allocation (PPA) may support higher depreciation claims, No depreciation is available on goodwill.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-32520\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/07\/cost-.png\" alt=\"Depreciation and Cost Step-Up after Conversion 2\" width=\"707\" height=\"352\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/07\/cost-.png 707w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/07\/cost--300x149.png 300w\" sizes=\"(max-width: 707px) 100vw, 707px\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Merger_of_Limited_Liability_Partnerships\"><\/span><span style=\"color: #000080;\"><strong> Merger of Limited Liability Partnerships <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"padding-left: 40px;\">Limited Liability Partnerships can merge through the National Company Law Tribunal (NCLT) under LLP Act provisions. Key Tax Issues<\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Capital Gains: Unlike company amalgamations, there is no specific exemption for LLP mergers, and the transfer of assets may trigger capital gains tax.<\/li>\n<li>Carry Forward of Losses: Unlike Section 72A applicable to companies: No specific provision allows carry-forward of losses after LLP merger.<\/li>\n<li>Section 56(2)(x) : If assets are transferred at inadequate consideration : Tax consequences may arise in the hands of the transferee LLP.<\/li>\n<li>GST : Where the undertaking is transferred as a going concern, GST exemption may be available.<\/li>\n<li>Stamp Duty : Stamp duty implications depend on State laws, NCLT order and Nature of assets transferred<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Key_Takeaways\"><\/span><span style=\"color: #000080;\"><strong>Key Takeaways<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Limited liability partnerships and firms are taxed at about 34.94% effective rate. A share of profit received by partners is generally tax-free. A capital contribution by partners may trigger capital gains u\/s 45(3), Retirement or reconstitution of firms may attract tax under Sections 9B and 45(4), Tax-neutral conversion into a company is possible under Section 47(xiii) if prescribed conditions are met. Limited liability partnership mergers presently lack comprehensive tax-neutral provisions like company amalgamations. Limited Liability Partnerships provide limited liability, operational flexibility, and single-level taxation, making them attractive business vehicles.<\/p>\n<ul>\n<li><strong>Section 45(3)<\/strong> taxes partners on contribution of assets to LLPs\/Firms.<\/li>\n<li><strong>Under Section 56(2)(x)<\/strong> can create tax exposure if assets are contributed below FMV.<\/li>\n<li><strong>Sections 9B and 45(4)<\/strong> have fundamentally changed the taxation of retirement and reconstitution of firms.<\/li>\n<li><strong>under Section 48(iii)<\/strong> is crucial to avoid double taxation.<\/li>\n<li><strong>Section 47(xiii)<\/strong> offers a valuable tax-neutral route for conversion into companies.<\/li>\n<li>LLP mergers currently lack the tax benefits available to company amalgamations and require careful structuring.<\/li>\n<li>Valuation reports and documentation have become critical in virtually every restructuring involving LLPs and Firms<\/li>\n<\/ul>\n<div>\n<h3><span class=\"ez-toc-section\" id=\"Latest_Updates_on_Income_Tax_for_Firms_LLPs_AY_2025-26\"><\/span><span style=\"color: #000080;\">Latest Updates on Income Tax for Firms &amp; LLPs (AY 2025-26)<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-32524\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/07\/ITR-5.jpg\" alt=\"ITR 5\" width=\"816\" height=\"1280\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/07\/ITR-5.jpg 816w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/07\/ITR-5-191x300.jpg 191w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/07\/ITR-5-653x1024.jpg 653w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/07\/ITR-5-768x1205.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/07\/ITR-5-800x1255.jpg 800w\" sizes=\"(max-width: 816px) 100vw, 816px\" \/><\/p>\n<p>For Assessment Year 2025-26, Partnership Firms and Limited Liability Partnerships are taxed at a flat income tax rate of 30% on their total taxable income, irrespective of the amount of income earned. Unlike individuals, there are no slab rates applicable to firms or LLPs.<\/p>\n<ul>\n<li>Surcharge: A 12% surcharge is levied if the total taxable income exceeds \u20b91 crore. The surcharge is calculated on the amount of income tax payable.<\/li>\n<li>Marginal Relief: To ensure that a small increase in income above \u20b91 crore does not result in a disproportionately high tax burden, marginal relief is available. Under this provision, the additional tax payable due to the surcharge cannot exceed the amount by which the income exceeds \u20b91 crore.<\/li>\n<li>Health &amp; Education Cess :\u00a0A 4% Health and Education Cess is levied on the total of income tax and surcharge, if applicable.<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><strong>Alternative Minimum Tax (AMT)<\/strong><\/span><\/p>\n<p>Partnership Firms and LLPs are also subject to Alternative Minimum Tax (AMT). Where the regular income tax liability is lower than 18.5% of the adjusted total income, AMT becomes payable at 18.5% (plus applicable surcharge and cess).<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Tax_Structure_for_AY_2025-26\"><\/span><span style=\"color: #000080;\">Tax Structure for AY 2025-26<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"___1dmoc29 f10pi13n ftgm304 f1enuhaj fdclmfp f1nbblvp fat0sn4 f1ov4xf1 fekwl8i f1lmfglv f1oz7aqm f1abmfm4 f1w619qj f16h0jq8\">\n<table class=\"___1vyiefv f1ddd56o f16vktn6 f1ahpp82 f11qra4b f1uinfot fibjyge fvueend f9yszdx f1fu4s3n f3l3pb3 f10ghnd0 f8fmt76 fjvbh62 f1qrqxae f1vw5qpk fc02sbz fxawf59 fymf513 f1aoyrul f1el8yx3 f1pymoxg f1ofu761 fe6itr f7coize f1794535 f1o0pw0q fbjjl9v fk1v6el f16pyhcb f1ixlhx9 f12zef0i flu5r5u f19haqzy f1owmcxx f1oddm8q f1004tna fcoaxci fh0ee9u f15v23i2 f1dmj53 f1r1gcv9 f14z1veh ffufd3x f1ypplot f1660cg\" style=\"height: 223px;\" width=\"717\">\n<tbody>\n<tr>\n<th>Particulars<\/th>\n<th>Rate<\/th>\n<\/tr>\n<tr>\n<td>Income Tax<\/td>\n<td>30%<\/td>\n<\/tr>\n<tr>\n<td>Surcharge (if income exceeds \u20b91 crore)<\/td>\n<td>12%<\/td>\n<\/tr>\n<tr>\n<td>Health &amp; Education Cess<\/td>\n<td>4%<\/td>\n<\/tr>\n<tr>\n<td>AMT (where applicable)<\/td>\n<td>18.5% of adjusted total income<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<h3><span class=\"ez-toc-section\" id=\"Old_Regime_vs_New_Regime\"><\/span><span style=\"color: #000080;\">Old Regime vs New Regime<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>The new tax regime introduced for individuals and HUFs does not apply to partnership firms and LLPs. These entities continue to be taxed under the existing framework at the flat rate of 30%, along with applicable surcharge, cess, and AMT provisions.<\/li>\n<li>Partnership Firms and LLPs continue to enjoy a simple tax structure with a flat 30% tax rate, but their final tax liability may increase on account of surcharge, health &amp; education cess, and AMT. Therefore, proper tax planning and utilization of eligible deductions remain important for minimizing the overall tax burden.<\/li>\n<\/ul>\n<\/div>\n<div>\n<h3><span class=\"ez-toc-section\" id=\"Major_Deductions_Available_to_Firms_LLPs\"><\/span><span style=\"color: #000080;\">Major Deductions Available to Firms &amp; LLPs<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-32521\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/07\/Income-Tax-Deductions-for-Firm-LLP-768x1159_edited.png\" alt=\"Latest Updates for the AY 2025-26: Income Tax for Firm\/LLP For the Assessment Year (AY) 2025-26, income tax for LLP and Partnership Firms in India is subject to a flat income tax rate of 30% on their total income. This income tax rate for firm entities remains consistent regardless of income levels. However, in addition to this base tax rate, LLPs may also be liable to pay other charges, including surcharge, marginal relief, and health &amp; education cess, depending on their taxable income. These additional charges can impact the overall tax liability of an LLP, making it essential for businesses to understand how they are calculated. Let\u2019s break them down in detail: What is Surcharge? A surcharge is an extra tax levied on top of the regular income tax if a firm\u2019s taxable income crosses \u20b91 crore. The surcharge rates are as follows: 12% of the income tax amount if the taxable income exceeds \u20b91 crore. What is Marginal Relief? To prevent an excessive tax burden due to the surcharge, the marginal relief rule applies. Here\u2019s how it works: If the firm\u2019s net income exceeds \u20b91 crore, the total tax payable (including surcharge) should not be higher than the tax on \u20b91 crore by more than the excess income over \u20b91 crore. This ensures that firms don\u2019t pay disproportionately high taxes just because their income slightly exceeds the threshold. What is Health &amp; Education Cess? In addition to the income tax and surcharge, firms and LLPs must also pay a Health &amp; Education Cess of 4% on the total tax amount, including surcharge (if applicable). This cess helps fund educational and healthcare initiatives across India. Alternative Minimum Tax (AMT) for LLPs &amp; Firms LLPs and firms must also be aware of Alternative Minimum Tax (AMT). If their normal tax liability is less than 18.5% of their book profit, they must pay AMT at 18.5% of book profit (plus surcharge and cess, if applicable). In summary, while LLPs and firms are taxed at a flat 30% rate, the partnership firm tax rate also follows the same structure. However, additional charges like surcharge, marginal relief, and AMT play a role in determining the final tax outgo. Understanding these components can help firms plan their finances and tax-saving strategies efficiently! Firm\/LLP Tax Slabs for AY 2025-26: Old Tax Regime vs. New Tax Regime For partnership firms and LLPs, the tax structure is straightforward, with a flat LLP taxation rate applicable irrespective of income levels. Old Tax Regime: Tax Rate: 30% on total income. Surcharge: 12% if income exceeds \u20b91 crore. Health and Education Cess: 4% on income tax and surcharge. New Tax Regime: The new tax regime introduced for individuals and HUFs does not impact the taxation of partnership firms and LLPs. These entities continue to be taxed at the flat rate under the old regime.\" width=\"692\" height=\"1080\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/07\/Income-Tax-Deductions-for-Firm-LLP-768x1159_edited.png 692w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/07\/Income-Tax-Deductions-for-Firm-LLP-768x1159_edited-192x300.png 192w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/07\/Income-Tax-Deductions-for-Firm-LLP-768x1159_edited-656x1024.png 656w\" sizes=\"(max-width: 692px) 100vw, 692px\" \/><\/p>\n<p>Various Income Tax deductions available to Partnership Firms and LLPs for FY 2025-26. It categorizes deductions available under Chapter VI-A and certain profit-linked incentive provisions. The chart lists the section, nature of deduction, and eligibility conditions.<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Donations_%E2%80%93_Section_80G\"><\/span><span style=\"color: #000080;\">Donations \u2013 Section 80G<\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul>\n<li>Deduction is available for donations made to approved charitable institutions and funds.<\/li>\n<li>Deduction may be 50% or 100% depending on the notified institution and fulfillment of prescribed conditions.\u00a0Cash donation restrictions may apply.<\/li>\n<\/ul>\n<h4><span class=\"ez-toc-section\" id=\"Donations_for_Scientific_Research_and_Rural_Development_%E2%80%93_Section_80GGA\"><\/span><span style=\"color: #000080;\">Donations for Scientific Research and Rural Development \u2013 Section 80GGA<\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul>\n<li>Deduction is available for contributions made towards\u00a0Scientific research and Rural development projects.\u00a0Generally applicable where contributions are made to approved institutions.<\/li>\n<\/ul>\n<h4><span class=\"ez-toc-section\" id=\"Political_Contributions_%E2%80%93_Section_80GGB\"><\/span><span style=\"color: #000080;\">Political Contributions \u2013 Section 80GGB<\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul>\n<li>Deduction is available for contributions made to Registered political parties, Electoral trusts and\u00a0Cash contributions are not eligible.<\/li>\n<\/ul>\n<h4><span class=\"ez-toc-section\" id=\"Infrastructure_Undertakings_%E2%80%93_Section_80IA\"><\/span><span style=\"color: #000080;\">Infrastructure Undertakings \u2013 Section 80IA<\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul>\n<li>Available to eligible infrastructure facilities, industrial parks, and power generation and distribution undertakings.<\/li>\n<li>Deduction\u00a0100% of eligible profits for 10 consecutive years out of the prescribed period.<\/li>\n<\/ul>\n<h4><span class=\"ez-toc-section\" id=\"Special_Economic_Zones_SEZ_%E2%80%93_Section_80IAB\"><\/span><span style=\"color: #000080;\">Special Economic Zones (SEZ) \u2013 Section 80IAB<\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul>\n<li>Applicable to developers of special economic zones.<\/li>\n<li>Deduction\u00a0100% of profits derived from SEZ development activities for 10 consecutive assessment years.<\/li>\n<\/ul>\n<h4><span class=\"ez-toc-section\" id=\"Eligible_Startups_%E2%80%93_Section_80IAC\"><\/span><span style=\"color: #000080;\">Eligible Startups \u2013 Section 80IAC<\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul>\n<li>Available to qualifying startups recognized under applicable provisions.<\/li>\n<li>Deduction:\u00a0100% of profits and gains for any 3 consecutive years out of 10 years from incorporation.<\/li>\n<\/ul>\n<h4><span class=\"ez-toc-section\" id=\"Industrial_Undertakings_%E2%80%93_Section_80IB\"><\/span><span style=\"color: #000080;\">Industrial Undertakings \u2013 Section 80IB<\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul>\n<li>Available for specified industrial undertakings.\u00a0Deduction generally ranges from\u00a0100% of profits for initial years and\u00a025% to 30% thereafter, subject to conditions.<\/li>\n<\/ul>\n<h4><span class=\"ez-toc-section\" id=\"Housing_Projects_%E2%80%93_Section_80IBA\"><\/span><span style=\"color: #000080;\">Housing Projects \u2013 Section 80IBA<\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul>\n<li>Available to developers engaged in affordable housing projects.<\/li>\n<li>Deduction:\u00a0Up to 100% of profits from eligible housing projects subject to specified conditions.<\/li>\n<\/ul>\n<h4><span class=\"ez-toc-section\" id=\"Regional_Development_%E2%80%93_Section_80IC\"><\/span><span style=\"color: #000080;\">Regional Development \u2013 Section 80IC<\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul>\n<li>Applicable to businesses located in specified regions such as\u00a0Himachal Pradesh,\u00a0Uttarakhand,\u00a0Sikkim and\u00a0North Eastern States.<\/li>\n<li>Deduction:\u00a0100% of profits for initial years followed by reduced deductions in subsequent years.<\/li>\n<\/ul>\n<h4><span class=\"ez-toc-section\" id=\"North_Eastern_States_%E2%80%93_Section_80IE\"><\/span><span style=\"color: #000080;\">North Eastern States \u2013 Section 80IE<\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul>\n<li>Available to eligible businesses operating in North Eastern states.<\/li>\n<li>Deduction:\u00a0100% of profits for 10 assessment years.<\/li>\n<\/ul>\n<h4><span class=\"ez-toc-section\" id=\"Environmental_Business_%E2%80%93_Section_80JJA\"><\/span><span style=\"color: #000080;\">Environmental Business \u2013 Section 80JJA<\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul>\n<li>Applicable to businesses involved in the collection, processing, and Treatment of biodegradable waste<\/li>\n<li>Deduction:\u00a0100% of profits for 5 years.<\/li>\n<\/ul>\n<h4><span class=\"ez-toc-section\" id=\"Employment_Generation_%E2%80%93_Section_80JJAA\"><\/span><span style=\"color: #000080;\">Employment Generation \u2013 Section 80JJAA<\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul>\n<li>Available for employment of additional workers.<\/li>\n<li>Deduction:\u00a030% of additional employee cost for 3 assessment years.<\/li>\n<\/ul>\n<h4><span class=\"ez-toc-section\" id=\"Offshore_Banking_IFSC_Units_%E2%80%93_Section_80LA\"><\/span><span style=\"color: #000080;\">Offshore Banking &amp; IFSC Units \u2013 Section 80LA<\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul>\n<li>Available to specified units operating in:\n<ul>\n<li>International Financial Services Centres (IFSC)<\/li>\n<li>Offshore banking units<\/li>\n<\/ul>\n<\/li>\n<li>Deduction:\u00a0100% or 50% of specified income for specified periods.<\/li>\n<\/ul>\n<h4><span class=\"ez-toc-section\" id=\"Inter-Corporate_Dividends_%E2%80%93_Section_80M\"><\/span><span style=\"color: #000080;\">Inter-Corporate Dividends \u2013 Section 80M<\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul>\n<li>Deduction available in respect of certain dividends received and redistributed before the filing due date.<\/li>\n<\/ul>\n<h4><span class=\"ez-toc-section\" id=\"Producer_Companies_%E2%80%93_Section_80PA\"><\/span><span style=\"color: #000080;\">Producer Companies \u2013 Section 80PA<\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul>\n<li>Applicable to eligible producer companies engaged in agricultural activities.<\/li>\n<li>Deduction:\u00a0100% of profits subject to turnover and other prescribed conditions.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Important_Practical_Note\"><\/span><span style=\"color: #000080;\">Important Practical Note<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>For most normal partnership firms and LLPs, commonly relevant deductions are:<\/p>\n<ul>\n<li>Section 80G (Charitable Donations)<\/li>\n<li>Under Section 80GGB (Political Contributions)<\/li>\n<li>Section 80JJAA (Additional Employee Cost)<\/li>\n<li>Under Section 80IA \/ 80IAB (Infrastructure and SEZ Projects)<\/li>\n<li>Section 80IBA (Affordable Housing Projects)<\/li>\n<li>Under Section 80LA (IFSC Units)<\/li>\n<\/ul>\n<p>Many of the profit-linked deductions, such as Sections 80IA, 80IB, 80IC, 80IE, 80IAB, and 80IBA are available only when the undertaking satisfies specific conditions regarding commencement date, location, nature of business, audit requirements, and filing of return within the due date.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Overview Taxation of Firms &amp; LLPs in India Key aspects of taxation of partnership firms and limited liability partnerships are as follows. Basic Tax Rate of Firms and LLPs Partnership firms and limited liability partnerships are taxed at a flat rate of 30%. After surcharge and health &amp; education cess, the effective tax rate may &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/32517"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=32517"}],"version-history":[{"count":3,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/32517\/revisions"}],"predecessor-version":[{"id":32525,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/32517\/revisions\/32525"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=32517"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=32517"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=32517"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}