What is the tax status of Limited Liability Partnership (LLP)?
Kundan Shah, Gandhi Nagar
The LLP Act itself maintains a studied silence on the issue. It would have been so much better had it spelt out the tax status of an LLP. One hopes the ensuing Budget would do it. Under the income-tax law, there is no difference in the tax treatment of a listed and unlisted company except that a company with not more than Rs 1 crore of income is spared of the burden of paying surcharge of 10 per cent. There is no material difference in the tax treatment of a company and partnership either, except that MAT is applicable only to companies.
It remains to be seen whether the Finance Minister confers any extra tax concession to LLPs so as to make the I-T Act the gravitas for unlisted companies and firms to embrace the idea of LLP.