~~with focus on tax education~~

AOP Taxation - Points to be Remembered

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1 – AOP income is taxable @ 25%

2-Share of members from AOP is exempt and included in member’s income only for rate purpose.

3- Calculation of tax liability of members
            Tax liability (including share from AOP)      X   Taxable income (Without share from AOP)
            Taxable income (including share from AOP)

4- Same as mentioned above “Average rate formula” will be used while calculating tax credit / rebate for Donation / Mark up / APF contribution / Investment in shares. (Section-65)

5- How to determine salaried / non – salaried case
                        Taxable salary____________
            Taxable income without AOP share

6- FTR income in the hands of members of AOP shall not be considered while calculating share of profit from AOP.

7- Following expensed paid to a member by AOP shall not be allowed as deduction to AOP for calculating AOP’S taxable income. (i-e) any amount received by members on account of above would be considered as share from AOP on accumulated basis.
  •         Any profit on debt,
  •         brokerage,
  •         commission or
  •         salary or other remuneration
8- AOP cannot generate rental income. (Except when share of members not identifiable and its covered under income from business) - (Section-66)

9- Share of loss from AOP shall not be considered in the hands of members as the loss shall be C/F by AOP itself.

10- FTR income of AOP shall not be included in divisible income.

posted @ 10:08 AM,


At November 28, 2016 at 12:46 PM, Blogger Most Wanted said...

1 point is wrong, because there are slab rates for calculation of tax on AOP. 25% tax shall charge on small companies. other points also not confirm


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