~~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, , links to this post

Tax on Salary as per Budget 2012-13

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Tax slabs of salary income are proposed to be reduced from 17 to 5 in the finance bill 2012-13 which are as under:
1.            Salary Income less than 400000 tax will be 0%
2.            Salary Income exceeds 400000 but does not exceed 750000  tax will be 5% of amount exceeding 400000
3.            Salary Income exceeds 750000 but does not exceed 1500000 tax will be 17500 + 10 % of amount exceeding 750000
4.            Salary Income exceeds 1500000 but does not exceed 2500000  tax will be 92500 + 15% of  amount exceeding 1500000
5.            Salary Income exceeds 2500000 tax will be 242500 + 20% of amount exceeding 2500000.

posted @ 10:06 AM, , links to this post

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