Firm – Section 2(45) | Income-tax Act, 2025 vs 1961

§ 2(45) · Income-tax Act, 2025

Firm

ITA 2025 · 2(45) ITA 1961 · 2(23)(i)
Definition — Section 2(45)

Has the same meaning as assigned to it in section 4 of the Indian Partnership Act, 1932 — meaning persons who have entered into partnership with one another are collectively called a firm. The definition also includes a "limited liability partnership" as defined in section 2(1)(n) of the Limited Liability Partnership Act, 2008 — being a partnership formed and registered under that Act, where partners have limited liability and the entity has a separate legal identity distinct from its partners.

Act Comparison
Income-tax Act, 2025
2(45)
Firm
Income-tax Act, 1961
2(23)(i)
Firm
Key Points
  • Maps to Section 2(23)(i) of the 1961 Act
  • LLPs are explicitly included — taxed as firms at 30%
  • Firms are taxed at a flat rate of 30% plus surcharge
💡 Practical Note

LLPs were explicitly included as 'firms' after the LLP Act was enacted — they are taxed at the same rate as traditional partnership firms.

Published by Simplified Tax India — Clear, section-wise comparison of Income-tax Acts. ← Back to Section 2 Definitions Table
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