Taxation of limited liability partnership bill

In the general scenario, the tax-related matters are dealt with separately under tax laws so the taxation of LLPs is not provided under the LLP act. the taxation of LLPs are covered under the finance act,2009.

The provisions of the finance act of 2009 are as follows :

LLPs will be taxed similar to that of general

LLPs to be taxed on the lines similar to general partnerships under Indian partnership act 1932.taxation in the hands of the entity and exemption from tax in the hands of its partnership.
Consequent changes made in the income tax act 1961 include :
The word partner to include within its meaning a partner of a limited liability partnership.
The word firm to include within its meaning a limited liability partnership.
The word partnership to include within its meaning a limited liability partnership.
The partner shall sign the income tax return of LLP and if for some reason the partner is unable to sign then any partner can sign the return providing that the person much is into some unavoidable reason and the proof shall be deposited towards the same.
At the time of liquidation of LLP, every partner shall be jointly liable to pay the tax unless he proves that non-recovery of such thing cannot be attributed to any gross neglect, misfeasance or breach of duty on his part.
It is regarded that the general partnership firm an LLP is treated equally in the income tax act.so if at that case there is the conversion of general partnership firm to LLP that shall have no tax implication on that. if the rights and responsibilities of the partners do not changes and if the firms' assets and liabilities do not change.
If any partner fails to cater to these provisions, section 45 of the income tax act shall apply
Verification and signing

the copy of the return to be filed with the registrar must be verified and digitally signed by the designated partners

Certification

The annual return should be accompanied by a certificate from a company secretary in practice that he has verified the particulars from the books and records of LLP and found them to be true and correct.

Inspection

The annual return filed by each LLP with the registrar shall be open for public inspection at the office of the registrar and shall be available for obtaining a certified copy thereof on payment of a nominal fee.

Penalty for non -compliance (sec – 34 (5) )

Any LLP which fails to file the Annual Return in the prescribed form on or before the due date shall be punishable with fine which shall not be less than twenty -five thousand rupees but which may extend to five lakhs rupees .in addition to LLP the act has also provided that every designated partner of such limited liability partnership shall be punishable with fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees