Partition the property

Dear Suresh,

If all the partners of the family are ready to divide the property among themseleves, then the "family settlement deed" is the best option. Since, the ownership is not transferred. therefore, there is no question of capital gain tax.

You may call on 9324538481 for legal assistance.

Regards,

Advocate Rohit Dalmia

Mumbai

Dear friend

probably an auditor may give u a right  answer rather lawyer.  any how your case seems to conversion of firm to partner or viceversa, here tax implication is always be there while doing so under the head capital gains, 

A partnership firm can own property.This is subject to a few conditions because of the peculiar nature of partnership entities.Under the law,a partnership is a relationship between individuals who have agreed to share the profits and losses of the business,which is carried on by all,or any one of them acting for all.Each of such persons are referred to as 'partners'.The business concern is known as a 'partnership firm'. It is to be noted that a partnership is not a legal entity.Under the Transfer of Property Act,a transfer of property can only be made by or in favour of a legal person.A partnership firm does not have a separate legal identity,different from the partners.It cannot sell or purchase property in its own name.A partner has no implied authority to sell or buy property on behalf of the partnership.The property of such a firm is the joint property of all the partners held in their names jointly.Partnership property consists of property originally brought in by the individual partners as their capital contribution.It can also include property purchased by the partners jointly out of the funds belonging to the partnership. Under the law,in order to bind the firm and its partners,every act must be in the name of the firm or expressly on behalf of the firm.As such,a firm should be duly represented by one or more of its partners as a party to any such property transaction. In order to enter into transactions involving property,specific partners of the partnership firm must be made parties.Just dealing with or mentioning the firm's name is not enough.The partners need to be parties to the agreement of sale or purchase of property.It could be all the partners,or some of them,having specific authority to do so on behalf of the other partners,representing the firm.A specific power of attorney needs to be executed in favour of such partners and attached with the property documents. A partner can make an agreement with other partners to the effect that a property is transferred to the partnership firm as a part of his capital contribution.This fact should be mentioned in the partnership deed as well. Properties directly purchased by the firm in its own name become the properties of the firm.Properties which are brought into a partnership firm by the partners as their respective capital contributions become properties of the firm too.If a partner brings in property at the time of formation of the partnership firm,it does not require registration.It is to be noted that the property should have been brought into the firm only at the time of the formation and not any time later when the firm has already come into existence. Transfer of property by or in favour of a firm without the names of partners is not possible.This does not apply to dissolution of a partnership firm.In case of dissolution of a firm and consequent distribution of assets,where the partnership property is divided or distributed among partners or taken over by one or more partners from others,it does not amount to transfer of property. If a partner has been given the power of attorney to deal on behalf of others in the firm,in case of a property transaction,this fact should be specifically mentioned.