Samiti formed under rajasthan societies act

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Mustafa (Querist)
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06 November 2014 Is society formed under Rajasthan Society Act as AOP is taxable at maximum marginal rate? As share of its members are not determinate.

Also, its member are farmers and all member income is below the taxable income.

Kindly inform me about the taxability of the Samiti.

Amol S Joglekar

Amol S Joglekar (Expert)
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06 November 2014 Yes, it will be taxed at maximum marginal rate. (Currently 30%)

Mustafa

Mustafa (Querist)
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06 November 2014 Thanks for your valuable reply Mr Amol.
But as per section 167B :- Where the individual shares of the members of an association of persons or body of individuals (other than a company or a co- operative society or a society registered under the Societies Registration Act, 1860 (21 of 1860 ), or under any law corresponding to that Act in force in any part of India) in the whole or any part of the income of such association or body are indeterminate or unknown, tax shall be charged on the total income of the association or body at the maximum marginal rate: Provided that, where the total income of any member of such association or body is chargeable to tax at a rate which is higher than the maximum marginal rate, tax shall be charged on the total income of the association or body at such higher rate.

It was mention that "other than a company, co-operative society, register society". So by this they are not taxable at maximum marginal rate even if their share is unknown.

Amol S Joglekar

Amol S Joglekar (Expert)
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06 November 2014 so? What is your problem? We dont have to appply the test of determinate share in case of Company and Society...isnt it?

Mustafa

Mustafa (Querist)
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06 November 2014 Thanks again for your reply.
My query is that Whether Society Register Under Rajasthan Society Act and all of its members (share unknown) are farmers having income below taxable limit, so should it be taxable at maximum marginal rate or normal rate applicable to individual?

Amol S Joglekar

Amol S Joglekar (Expert)
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06 November 2014 a flat rate of 30% shall be applicable.

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