Amended and updated notes on section 188 of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to Succession of one firm by another firm.
Chapter XVI (Sections 184 to 189A) of the Income Tax Act 1961 deals with the provisions related to special provisions applicable to firms. Section 188 of IT Act 1961 provides for Succession of one firm by another firm.
Recently, we have discussed in detail section 187 (Change in constitution of a firm) of IT Act 1961. Today, we learn the provisions of section 188 of Income-tax Act 1961. The amended provision of section 188 is effective for financial year 2022-23 relevant to the assessment year 2023-24.
In this article, you will learn detail of the provisions of section 188 of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962 as provided by Ministry of Law and Justice, Government of India.
Section-188: Succession of one firm by another firm
Where a firm carrying on a business or profession is succeeded by another firm, and the case is not one covered by section 187, separate assessments shall be made on the predecessor firm and the successor firm in accordance with the provisions of section 170.