An investment fund (Investment Fund X) incorporated in India in the form of a LLP has 35 unit holders each holding 2 units. The particulars of…

CA Final · Direct Tax Laws and International Taxation · MTP · September 2025
An investment fund (Investment Fund X) incorporated in India in the form of a LLP has 35 unit holders each holding 2 units. The particulars of income of Investment Fund X for the P.Y.2024-25 is as follows: (i) Business income -14 lakh; (ii) Long-term capital gains (transfer takes place on 14.5.2024) -21 lakhs; and (iii) Income from other sources -7 lakhs. Another investment fund (Investment Fund Y) incorporated in India in the form of a company has 50 unit holders each holding 4 units. All unit holders have held the units for a period of more than a year. The particulars of income of Investment Fund Y for the P.Y.2024-25 is as follows: (i) Business loss – (10 lakh); (ii) Long-term capital losses - (20 lakhs); and (iii) Income from other sources -6 lakhs. From the information given above, choose the most appropriate answer to MCQ.5 to 8 below:
(A) 42 lakhs is taxable in the hands of the investment fund
(B) ₹ 1,20,000 is taxable in the hands of each unit holder
(C) 21 lakh is taxable in the hands of the investment fund; ₹ 60,000 is taxable in the hands of each unit holder
(D) 14 lakh is taxable in the hands of the investment fund; ₹ 80,000 is taxable in the hands of each unit holder

Suggested Answer and Working Notes:

Correct Answer: Option (D)

14 lakh is taxable in the hands of the investment fund; ₹ 80,000 is taxable in the hands of each unit holder

Topics: Double Taxation Relief, Capital Gains, Non-Resident Taxation

Open in Interactive Practice Hub · Full Practice Hub · Chapter Weightage · More in this subject

Related Questions in this Topic