Succession of one firm by another firm

Income-tax Act, 2025

When one firm takes over another firm's business, they will be assessed separately for tax purposes. This means the original firm and the new firm will each get their own tax assessment.

The tax rules for this are covered under section 313.

The partners of both firms may be held jointly and separately liable for any tax owed.

📜 Official text of the section +

328. Where a firm carrying on a business or profession is succeeded by another firm, except in a case covered by section 327, separate assessments shall be made on the predecessor firm and the successor firm as per the provisions of section 313. Joint and several liability of partners for tax payable by firm.

Plain-language summary — not the official text. Refer to the bare Act and confirm with a professional for your specific case.

Related sections

§ 302Legal representative § 303Representative assessee § 304Liability of representative assessee § 305Right of representative assessee to recover tax paid § 306Who may be regarded as agent § 307Charge of tax where share of beneficiaries unknown

← All sections of IT Act 2025