When a partner receives a partnership interest in exchange f

When a partner receives a partnership interest in exchange for services what amount would be taxable and how would it be reported? What would their basis be in the partnership interest?

Solution

The Interest on Capital received by the partner in lieu of services rendered is taxable under the head income from business and profession according to Tax laws of India. It will be shown as taxable income.

The basis of partnership Intgerest is according to the partnership agreement.If the partnership agreement is silent then the interest will be 12 % p.a.