Rate of tax in the case of chamber of commerce registered u/s 25 of co.Act

[GOPAL HARLALKA]

Chamber of commerce is registered u/s 25 of the Co. Act 1956, Chamber is not registered u/s 12A of the Incometax.

There is surplus of income over expenditure. A.O has calculated tax at maxium marginal rare i.e. 30%

Is A.O. correct. There is circular no.320 dated 11/01/1982 . According to the circular tax will payable at rate

ordinarily applicable to the total income of an A.O.P. and not at the maxium marginal rate.

AI Summary

Tax rate for chambers of commerce without income tax registration: taxable at AOP ordinary rate, not maximum marginal rate. Whether a chamber of commerce registered as a non profit company but not registered for income tax exemption should be taxed on surplus at the maximum marginal rate or at the rate ordinarily applicable to an Association of Persons; Circular No. 320 indicates tax is payable at the ordinary AOP rate rather than the maximum marginal rate.