Comparison of section 311 "Charge of tax where shares of members in association of persons or body of individuals unknown, etc." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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....viduals (BOI) are indeterminate or known. This matters to AOPs/BOIs, their members and the tax department because it prescribes the rate at which such aggregate entities are taxed in absence or presence of identifiable member shares. Effective date or enactment timing: Not stated in the document. Background & Scope Statutory hooks: Clause 311 (Bill) addresses the charge of income-tax on associations of persons and bodies of individuals. It mirrors and is substantively comparable to Section 311 of the Income-tax Act, 2025 (Document 1). Coverage: taxation of the total income of an AOP/BOI depending on whether individual members' shares in whole or part of the income are indeterminate/unknown or determinate/known. Definitions or explanat....

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....provision (sub-section 3): Shares shall be deemed indeterminate/unknown if they are indeterminate/unknown at formation or at any time thereafter. Interpretation Legislative intent and interpretive principles indicated by the text: The clause seeks to prevent rate-arbitrage or avoidance by ensuring that where individual entitlement cannot be ascertained, the AOP/BOI is taxed at the highest applicable personal rate (maximum marginal rate) unless a member's own total income attracts an even higher rate. Where shares are known, the clause aims at equitable allocation: members who are already taxed at higher personal rates bear tax on the income attributable to them at those higher rates; remaining income is taxed at the maximum marginal r....

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....than the maximum marginal rate. The portion of AOP income attributable to that member is taxed at the higher rate; remaining AOP income is taxed at the maximum marginal rate. (Follows sub-section (2)(b)(i) & (ii).) Interplay Interaction with other legislation or administrative instruments: Clause 311 explicitly references "the Finance Act of the relevant year" for determining the "maximum amount which is not chargeable to tax" in relation to a member. Beyond that cross-reference, the text does not mention rules, notifications or circulars. Practical application will therefore require recourse to the Finance Act and possibly to other provisions of the Income-tax law for rate definitions and aggregator rules. Specific cross-references to Ru....

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....otal income is chargeable at a rate higher than the maximum marginal rate and then a separate sub-section (3) dealing with determinate shares with sub-clauses (a)/(b). Clause 311 (Bill) presents indeterminate shares in sub-section (1), determinate in sub-section (2), and the deeming provision in (3). * Practical impact: No substantive change; differences are organizational only but could affect citation precision during debate or drafting amendments. * Terminology concerning "maximum marginal rate": Both documents use the term; neither defines it. * Practical impact: Because both texts leave the term undefined within the clause, reliance on external provisions (e.g., Finance Act) will be necessary. Clause 311 explicitly ties the taxab....