Difference between AOPerson & AOPersons(trusts)

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Querist : Anonymous

Querist : Anonymous (Querist)

24 March 2010 Pls tell me diff. between Associaion of Person & Association of Persons (trusts)

if only registration under Public trust,moa and reg. in charity comm.

sivadas chettoor

sivadas chettoor (Expert)
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24 March 2010 Please note that it is not necessary that in all cases trusts should be assessed as AOP. It can also be assessed as an Individual.

Querist : Anonymous

Querist : Anonymous (Querist)

24 March 2010 do you explain more ?

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Querist : Anonymous

Querist : Anonymous (Querist)

24 March 2010 do you explain more ?

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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21 July 2024 The terms "Association of Persons (AOP)" and "Association of Persons (Trusts)" refer to specific categories of entities under Indian tax laws. Here’s a brief explanation of each:

### Association of Persons (AOP):
- **Definition**: AOP refers to a group of two or more individuals or entities (including companies, firms, etc.) who come together for a common purpose or to carry out a joint venture or business activity.
- **Taxation**: AOPs are taxable entities under Indian income tax law and are assessed as a separate unit of taxation. They are taxed at the applicable rates, similar to how companies are taxed.

### Association of Persons (Trusts):
- **Definition**: AOP (Trusts) specifically refers to trusts formed under the Indian Trusts Act, 1882, or other relevant laws. These trusts are created for charitable or religious purposes and typically manage assets or funds for the benefit of beneficiaries.
- **Taxation**: AOPs (Trusts) are also considered taxable entities but are generally taxed differently from regular AOPs. Income from charitable activities may be eligible for specific tax exemptions under Section 11 and Section 12 of the Income Tax Act, provided certain conditions are met.

### Differences:
- **Purpose**: AOP can be formed for any lawful purpose, including business activities, whereas AOP (Trusts) are specifically formed for charitable or religious purposes.
- **Legal Structure**: AOP can have various legal forms (individuals, companies, firms), while AOP (Trusts) are trusts registered under the Trusts Act or other relevant laws.
- **Tax Treatment**: AOPs are taxed at regular rates applicable to entities, whereas AOPs (Trusts) may benefit from tax exemptions if they meet the conditions under Sections 11 and 12 of the Income Tax Act.

### Registration under Public Trust:
- If an entity is registered as a Public Trust under the relevant state's Trusts Act or with the Charity Commissioner, it typically qualifies as an AOP (Trusts). Registration involves filing a Memorandum of Association (MOA) or similar document outlining the trust's objectives and governance structure.
- Such entities are then subject to specific regulations governing trusts and charitable activities, including compliance with reporting requirements to maintain their tax-exempt status under the Income Tax Act.

In summary, the distinction lies primarily in the purpose of formation and the specific legal framework governing each type of entity under Indian law. AOPs can have various purposes, including business activities, while AOPs (Trusts) are specifically for charitable or religious purposes, benefiting from potential tax exemptions under certain conditions.