Aop taxation

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AASHI (Querist)
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23 May 2014 I have to file Income Tax Return of an AOP for AY 12-13 and 13-14 which is NOT a trust and percentage share of its members are not determined. The gross total income of AOP is 82000/-.

Kindly suggest the tax leviable and how can I save the same.

CA Mohit Bansal

CA Mohit Bansal (Expert)
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26 May 2014 From the gross total income, prescribed deductions under Section 80A of Chapter VIA are made. The balance amount is the taxable income.

Interest paid by the AOP/BOI to a member is not allowed as deduction from the income of the AOP/BOI [Section 40(ba) of the Act].

Any salary, bonus, commission or remuneration (by whatever name called), paid by the AOP/BOI to a member is not allowed as deduction from the income of the AOP/BOI.

The total income of the AOP/BOI is taxable, either at the rates applicable to an individual, or at the maximum marginal rate or at a rate higher than maximum marginal rate. The tax incidence on AOP/BOI depends upon whether or not the individual shares of members in the whole or in any part of the income of the AOP/BOI are determinate:-
Where shares of members are indeterminate(under Section 167B)

The tax is charged on the total income of the AOP/BOI at the maximum marginal rate, which is the rate of tax (including surcharge, if any) applicable in relation to the highest slab of income in the case of an individual as specified in the Finance Act of the relevant year. However when any member is charged at a higher rate than maximum marginal rate, the income shall be taxed at a higher rate.

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