AOP vs.Partnership

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PREET (Querist)
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14 December 2016 Dear,Experts, If two or more individuals want to enter into works contact business forming a mutual concern say,either Partnership Firm or AOP. But,since the income of the firm will taxable by a flat rate of 30%+cess.,so,in order to save tax and to avail the tax benefit can they alternatively form an AOP,by a deed(unregistered) to conduct same business?What issues they may face for not forming a partnership firm? waiting for your advice.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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14 December 2016 Partnership firm will be better choice. Partners can claim interest on capital and salary from the firm on which no tax payable by the firm.

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PREET

PREET (Querist)
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28 January 2017 Thank you Sir.

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