05 December 2010
Hello my colleagues and all respected CA's i want to ask some querries related to formulation of one helping institution for poor people. so please guide us for that.
-->We are 10 friends. We want to contribute Rs.2500/- each per month and With that money,we want to help poor people who need money for specific purpose like marriage,education etc. we will provide loan with 3% per annum.
(1)for this purpose we want to open a bank account but can bank open a bank account without any legal agreement.? (2)if we create just a mutual understanding in 100 Rs./- stamp paper and give a name for that..can bank allow us to open a bank account..?? (2)should we create AOP/BOI..?? (3)what are TAX implications in AOP/BOI..?? (4)what are the wordings "Maximum Marginal Rate" for tax rate in AOP/BOI that used in Act..??
05 December 2010
Bank can open account by submitting Trust Deed along with name address and proof of trustees. It advisable to create a trust if the purpose is relief of poor otherwise create AOP/BOI. Tax implications under I.T. depends on sharing ratio. If sharing ratio is determinable and no one has income (excluding income from trust)exceeding maximum amount which is not chargeable to tax, then income of AOP/BOI is shall be liable to tax as individual. If anyone has income exceeding maximum amount not chargeable to tax, entire income shall be liable to tax at maximum marginal rate. If anyone is liable to tax at the rate exceeding MMR then share of such assesse liable to tax at that maximum rate and balance is taxable at MMR. MMR means 30%. If sharing ratio is indeterminate and no one is liable to tax exceeding MMR, then entire income shall be liable to tax at MMR otherwise at that rate exceeding MMR.
CAclubindia
