income tax
This guide provides an overview of Income Tax Assessment for Associations of Persons (AOP) and Bodies of Individuals (BOI) for the Assessment Year (AY) 2024-2025. It covers the computation of Gross Total Income, available deductions, applicable tax rates, special income categories, and recent amendments introduced by the Finance Act 2023, especially focusing on Section 115BAC, which features revised tax rates. Stay updated about the latest tax slabs and surcharge rates for AOPs and BOIs.
An Association of Persons (AOP) is defined as a collective of two or more individuals united for a common goal or action that yields income, profits, or gains. Under the Income Tax Act, AOPs and BOIs are recognized as distinct entities for assessment purposes.
Gross Total Income is calculated by summing up the following income categories:
AOPs and BOIs can avail themselves of various deductions, including:
The tax rates applicable to AOPs and BOIs are structured as follows:
| Total Income | Tax Rates (Percentage) |
|---|---|
| Up to Rs 250,000 | Nil |
| Rs 250,001 to 500,000 | 5% |
| Rs 500,001 to 1,000,000 | 20% |
| Above Rs 1,000,000 | 30% |
Effective April 1, 2024, the Finance Act 2023 introduces amendments under Section 115BAC pertinent to AOPs and BOIs:
| Total Income | Tax Rates (Percentage) |
|---|---|
| Up to Rs 300,000 | Nil |
| Rs 300,001 to 600,000 | 5% |
| Rs 600,001 to 900,000 | 10% |
| Rs 900,001 to 1,200,000 | 15% |
| Rs 1,200,001 to 1,500,000 | 20% |
| Above Rs 1,500,000 | 30% |
The table below summarizes the surcharge rates for Individuals, HUFs, AOPs, BOIs, and Artificial Juridical Persons:
| Nature of Income | Up to Rs. 50 lakhs | More than Rs. 50 lakhs up to Rs. 1 crore | More than Rs. 1 crore up to Rs. 2 crores | More than Rs. 2 crores up to Rs. 5 crores | More than Rs. 5 crores |
|---|---|---|---|---|---|
| Short-term Capital Gain under Section 111A or 115AD | Nil | 10% | 15% | 15% | 15% |
| Long-term Capital Gain under Section 112A or 115AD | Nil | 10% | 15% | 15% | 15% |
| Dividend Income (excluding special rates) | Nil | 10% | 15% | 15% | 15% |
| Unexplained Income under Section 115BBE | 25% | 25% | 25% | 25% | 25% |
| Any Other Income | Nil | 10% | 15% | 25% | 37% |
For AOPs choosing the alternate tax regime under Section 115BAC, the surcharge will be 25%, capping at 15% for AOPs composed entirely of companies.
Recent changes to Section 115BAC include:
Grasping the details of tax assessment for AOPs and BOIs is crucial for effective financial planning and compliance. The amendments introduced in the Finance Act 2023 highlight the evolving landscape of tax regulations that organizations need to navigate.