The document discusses the tax implications of converting a sole proprietorship or firm into a company under section 47(xiii) of the Indian Income Tax Act. Some key points: 1) All assets and liabilities of the sole proprietorship/firm must be transferred to the company. The sole proprietor/partners must receive shares of the company. 2) The sole proprietor/partners must hold at least 50% of voting power and shares in the company for 5 years. 3) If these conditions are not fulfilled, exemptions will be withdrawn and any previously un-taxed capital gains will be taxed in the hands of the company. 4) A case study is provided

1. Conversion of sole proprietorship into a company By Prof.Augustin Amaladas

6. Exercise-1-Case study Balance Sheet as on 1 st April 2008 Plant 80,000 House property 2,00,000 (acquired in 1982-83) Stock in trade 40,000 Debtors 70,000 Bank 10,000 Capital X 1,00,000 Y 2,00,000 Sundry credi 1,00,000 Assets Liabilities