LLP’s will be treated as Partnership Firms for the purpose of Income Tax w.e.f assessment year 2010-11. No surcharge will be levied on income tax, and profit will be taxed in the hands of the LLP and not in the hands of the partners. Minimum Alternate Tax and Dividend Distribution Tax will not be applicable for LLP.

Remuneration to partners will be taxed as “Income from Business & Profession”. No capital gain on conversion of partnership firms into LLP. Designated Partners will be liable to sign and file the Income Tax return. Capital Gain on conversion of Company into LLP will be exempt from tax, if prescribed conditions are complied with.

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