Taxability of a person to whom the profit share is assigned, Income Tax

[NARESH GUPTA]

I want to know the tax liablity of the person if he assign his share of profit from a partnership firm in which he is a partner to any other person and 2nd case is if he transfer his share in partnership firm to another partnership with that third person.

Posts / Replies

[Rama Krishana]

There are different situations. Assignment as a voluntary act or by overriding title have different effects under Income Tax. But, whereas the question is related to share in a partnership firm is there, I thing that there should not be any tax liability on the partner for transferring / assigning / selling his share to another person but if the same is done without any consideration that my be taxable in the hands of such other person (other than relatives) under section 56.