Partner's capital in LLP

Income tax is not payable on capital investment by partners. 

You can take the same as loan as it is for short term needs.

You can show it as loan from partner. Dont show it as addition to capital.

You must have paid stamp duty on capital introduced and not income tax.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you.

Yes you can show it as loan & even pay interest on it around 9-12%. BDW This is a method to restructure profit.

Income tax is always required to be paid on Income & not initial Tax. You need to grab the person who told you regarding this tax on capital thing & try to understand what he actual meant & what is it for which you paid tax.

Dear Sir,

Hope you are doing well !!

Yes, it is better to show it as debt.

No, there is no tax liability on capital contribution by partners.

Hello,

Yes, You can show it as loan from the partner. You must have paid stamp duty on the capital contribution and not income tax.

I hope that this answer satisfies your requirements.

Regards,

CA Hunny Badlani

Firstly, You dont need to pay income tax on capital contribution in LLP. I am not sure which tax have you paid initially.

Further, if you eventually honna return the money, its better to show it as a a loan.

Dear Sir,

Here is my reply to your query:

You can accept the money in the LLP from the Partner as a interest free loan and can repay it later on without any time limit. All the money accepted and returned in LLP should be though the banking channels i.e netbanking, account payee cheque.

Thanks and Regards 

Divya Chugh 

- There is no tax on the capital introduced. File rectification to get the refund of tax paid. 

- For partner infusion, show it as a loan.