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about AOP

30 October 2009

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4 Replies

Amol Gopal Kabra (CA,CS,DISA) (Practicing CA) (8539 Points)
Replied 30 October 2009

The members of AOP can raise bills on AOP as the AOP is different person for Income Tax Purposes. As a partner in a partnership firm can get rent, interest, salary, any other expenditure, etc. the same way, a member of AOP can also raise bills on AOP.

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CA Mohit jain (CA ) (51 Points)
Replied 30 October 2009

sir

Amol Gopal Kabra (CA,CS,DISA) (Practicing CA) (8539 Points)
Replied 30 October 2009

Sorry to say, what i said was not correct. The correct view is as below.

In case of AOP / BOI the income will be computed as below.

Any Salary, bonus, commission or remuneration, or interest (whether on loan, capital or borrowing) by whatever name called shall not be deductible. The total income of the AOP / BOI is taxable at the rates applicable to individual or at the maximum marginal rate or a rate above maximum marginal rate. the computation of the tax of the AOP / BOI shall also further depend upon the individual incomes of the members and also their shares in the AOP.

varun sharma ( CA Final , M.Com) (87 Points)
Replied 30 October 2009

hi Mohit,

I think the above bill raised reg consultancy of members to AOP is allowed. Tds will be deductible. and treatment in AOP will be these bills are ragarded as outlflow as share of com and other exp as specified in act such as interest, salary, bonus,& remuneration by what ever name called paid to members will be deducted from the gross income of AOP , the net income that before deducting the tax, will be distributed to members in their sharing ratio. then the member are indiviualy liable for their share of profit and other income, their compution will be made seperatlly.. however AOP will pay the tax on the amount gross amount of income.

These provisions are sub to sec 67 A when the shares of members in AOP are known. otherwise if their is com member the higher rate will be applicable...