Section 45(3) - Capital Gain on transfer of a capital asset by a partner/member to firm/AOP/BOI

• Section 45(3) of the Income Tax Act 1961, prescribes provisions for taxation of capital gains on transfer of a capital asset by a partner/member to firm/AOP/BOI.

• Where any capital asset is transferred by a partner to a firm by way of capital contribution or otherwise, it shall be chargeable to tax as income of such person of the previous year in which such transfer takes place. 

• The full value of consideration for the purposes of section 48, shall be the amount recorded in the books of accounts of the firm as the value of capital asset.