AOP Taxation - Points to be Remembered
Wednesday, June 6, 2012
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 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,
- commission or
- salary or other remuneration
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.
Tax on Salary as per Budget 2012-13
Saturday, June 2, 2012