Capital Gain tax for Partnership Firms

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  1. vishonboard

    vishonboard New Member

    Dear experts,

    I am looking to set up a partnership firm with main activity of trading/investing in capital market. Below is my understanding of taxation for the same.

    1. Income will be taxed @ 30 %
    2. Share and mutual funds SCG tax @ 15 %
    3. No long term gain ..

    based on that I tried to compare scenario of Partnership Vs individual captured in attached document.

    May I request expert opinion and comments, is it worth going for a partnership firm. Pros and cons of the same. calculations based on Ref : http://www.charteredclub.com/partnership-tax/
    (may have missed a finer details of some IT sections)

    Scenario:

    1. Partnership’s source of income is short term CG ONLY.
    2. Income of 5 lacs from Short term capital gain with delivery based trading (NO DERIVATES OR INTRADAY).
    3. Assuming there is no TAX liability on 3 lacs of Long term CG which is not shown in attached calculation.
    4. Borrowed 5 lacs and paying out interest @ 12 % per anm to 3rd party (non partner individual/entity)

    Query:
    If ONLY income is from capital gain for partnership, is it allowed to deduct expenses and what would be the final TAX rate on taxable amount is it 15 % or 30 % ?

    Regards,
    Vishonboard
     

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