Taxation of AOP

[Ali Ahmed Khan]

An AOP having income solely from House property, TDS for the same has been deducted & file return for the period fy13-14 showing 100% tax refundable, as GTI shown nil because income received is distributed among members in their respective determine shares & thus AOP remain with no income left . But notice u/s139(9) recieved stating why GTI is nil against which TDS is claim for refund. My query is whether AOP is taxable including Income from House Property or members are taxed. Although if members are taxed than how TDS shall be utilised for payment of tax.

[Ganeshan Kalyani]

If the rental income is received by the members and the tds was deducted under each members PAN then the GTI for taxation shall be considered memberwise and not AOP as a whole. pls. Check this.

[DR.MARIAPPAN GOVINDARAJAN]

This is an interesting query. I am eager for the advice of the experts.

[Ali Ahmed Khan]

Rental income were received by AOP, & TDS were deducted on AOP's PAN.

Here I suppose GTI of AOP should include Rental income after deducting 30% of std deduction allowed under House Property & there after AOP shall be chargeable for Tax at slab rate similar to individual & remaining profit after tax shall be distributed among members of AOP in their ratio as determine under their agreement.

Kindly correct me if I am wrong.

AI Summary

Taxation of AOP: where rental receipts and TDS attach to the AOP, the AOP bears tax and distributes post tax shares. Whether an Association of Persons or its members are taxable where rental income is received and TDS was deducted on the AOP PAN; if receipts are treated as AOP income, the AOP should include house property income in its gross total income after the statutory standard deduction, be assessed and taxed accordingly, and distribute remaining post-tax profits to members, whereas where receipts and TDS are recorded under individual members' PANs, taxation and GTI computation are conducted memberwise.