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Is profit from LLP taxable?
Yes, the profit earned by a Limited Liability Partnership (LLP) is taxable under the Income Tax Act, 1961.
LLPs are treated as separate legal entities, and their income is taxed at a flat rate of 30%, plus applicable surcharge and cess. LLPs do not benefit from the lower tax rates applicable to companies. Additionally, LLPs are not subject to the Dividend Distribution Tax (DDT) that applies to companies distributing profits to shareholders. Instead, the partners are taxed on their share of the profits only if the LLP distributes the income to them, as LLP profits after tax can be freely distributed without further tax implications for the LLP itself.
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