ASSOCIATION OF PERSONS

ASSOCIATION OF PERSONS

INADMISSIBLE EXPENSES:
1.       Salary to Partners
2.       Brokerage paid to any partner
3.       Interest on capital to any partner
4.       Commission paid to non-resident without tax deducted at source
5.       Residential bills
6.       Income Tax
7.       Legal Expenses
8.       Life insurance premium
9.       Provision for doubtful debts
10.   Advertising neon sign
11.   Charity and donations
12.   Reserve for income tax
13.   Accounting depreciation
14.   Cost of typewriter
15.   Commission for investment
ADMISSIBLE EXPENSES:
1.       Rent paid to partners for business premises
2.       Staff salary
3.       Staff utilities
4.       House rent allowance to staff
ALLOWABLE EXPENSES
1.      Salary of a partner
2.       Residential bills
3.       Brokerage paid to any partner
4.      Rent of office/business premises of partners
5.      House rent allowance
6.      Interest on loans
7.      Hotel bills
8.       Interest on capital to any partner
9.       Life insurance premium

AOP TAX CALCULATION
Net profit
Add
Inadmissible expenses
Less
Capital Gain on sale of Securities
Income from property (Credited)
Total Business Income
Add
Income from property (Credited)
Less:  Repair charges
Taxable Income
Tax liability of the firm
Allocation of profit among partners
Taxable Income of AOP
Less
Income tax liability of the firm
Allowable expenses of the firm
Income allocatable to partners
Computation of total income of partners
Particulars
Share of divisible profit
Allowable Expenses
Total Income of partners
Add
Other Income of partners
Income from Property
Less: Repair Charges 1/5th RCT
Gain on sale of shares of private company
Interest from government securities (gross)  FTR
Dividend FTR
Brokerage and Commission FTR
Total taxable income for rate purpose
Computation of Gross Tax of Members
Computation of tax payable on actual taxable income
Tax on taxable income for rate purpose
X
Actual Taxable Income
taxable income
Amount allowed for rebate
Less
Average Relief
Tax on taxable income for rate purpose
X
Amount allowed for rebate
taxable income
Tax Payable with return
Income covered under FTR
Note:
FTR will not be written off for income below taxable limit

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