Section 167A — Charge of Tax in the Case of a Firm
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Provision: Live. Part DD of Chapter XV (Firms, associations of persons and bodies of individuals).
Subject: In the case of a firm assessable as a firm, tax is charged on its total income at the rate specified in the Finance Act of the relevant year.
Finance Act, 2026: No change. Chapter XV is untouched by the Finance Act, 2026; the section stands as amended up to the Finance Act, 2025.
A. SECTION COMMENTARY
1. A bare charging/rate clause
Section 167A is a one-line charging mechanic: a firm that is assessable as a firm is taxed on its total income at the rate prescribed by the annual Finance Act (the flat firm rate, with the applicable surcharge and cess). It is the firm-side analogue of section 167B for associations of persons. The section says nothing about how firm status is acquired or how the firm's total income is computed — those questions are governed elsewhere (sections 184 and 185 on firm status, section 40(b) on the admissibility of partner remuneration and interest, and the computation provisions of Chapter IV).
2. No section-specific jurisprudence; where the litigation actually sits
Because section 167A is pure rate-mechanics, it has generated no body of section-specific case law. Disputes about the taxation of firms are fought under the firm-status provisions (sections 184/185) and under section 40(b), not under section 167A. The honest treatise position is to treat section 167A as machinery and to cross-refer to the firm-assessment jurisprudence rather than to assert authorities 'on section 167A'. No such authority is invented here.
B. STATUTORY POSITION (verbatim text)
The text of the section, as it stands in the Act (FA-2025 base), is set out below.
167A. In the case of a firm which is assessable as a firm, tax shall be charged on its total income at the rate as specified in the Finance Act of the relevant year. Charge of tax where shares of members in association of persons or body of individuals unknown, etc.
C. AUTHORITIES
Candour rule. Section 167A is a bare charging clause with no section-specific case law. The relevant jurisprudence is that on firm status (sections 184/185) and partner remuneration/interest (section 40(b)).
Cluster A — Cross-reference (no direct authority)
Section 167A is machinery. For litigated questions on the taxation of firms, see the authorities under sections 184/185 (firm status) and section 40(b) (partner remuneration and interest); the cognate AOP charging provision is section 167B, below.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced from the Income-tax Act, 1961 (text as printed in the local Act, base text amended up to the Finance Act, 2025), with the publisher's footnote apparatus and amendment-marker brackets removed; three asterisks (***) denote words or a provision omitted by amendment and retained only to mark the omission. The Finance Act, 2026 amends no section of Chapter XV of the Income-tax Act, 1961 (its Part-A amendments touch ss.92CA, 139, 140B, 144B, 144C, 147A, 148, 150, 153, 153B, 220, 222, 234, 245, 245MA, 254 and 270A-276 only). Citations are stated as reported; orders of the Tribunal and High Courts are flagged as such. Where a section has not been judicially construed, that is stated candidly and the nearest governing authority is given. This material is for professional reference and is not legal advice.
CHAPTER XV — LIABILITY IN SPECIAL CASES
Section 167A — Charge of Tax in the Case of a Firm
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Provision: Live. Part DD of Chapter XV (Firms, associations of persons and bodies of individuals).
Subject: In the case of a firm assessable as a firm, tax is charged on its total income at the rate specified in the Finance Act of the relevant year.
Finance Act, 2026: No change. Chapter XV is untouched by the Finance Act, 2026; the section stands as amended up to the Finance Act, 2025.
A. SECTION COMMENTARY
1. A bare charging/rate clause
Section 167A is a one-line charging mechanic: a firm that is assessable as a firm is taxed on its total income at the rate prescribed by the annual Finance Act (the flat firm rate, with the applicable surcharge and cess). It is the firm-side analogue of section 167B for associations of persons. The section says nothing about how firm status is acquired or how the firm's total income is computed — those questions are governed elsewhere (sections 184 and 185 on firm status, section 40(b) on the admissibility of partner remuneration and interest, and the computation provisions of Chapter IV).
2. No section-specific jurisprudence; where the litigation actually sits
Because section 167A is pure rate-mechanics, it has generated no body of section-specific case law. Disputes about the taxation of firms are fought under the firm-status provisions (sections 184/185) and under section 40(b), not under section 167A. The honest treatise position is to treat section 167A as machinery and to cross-refer to the firm-assessment jurisprudence rather than to assert authorities 'on section 167A'. No such authority is invented here.
B. STATUTORY POSITION (verbatim text)
The text of the section, as it stands in the Act (FA-2025 base), is set out below.
167A. In the case of a firm which is assessable as a firm, tax shall be charged on its total income at the rate as specified in the Finance Act of the relevant year. Charge of tax where shares of members in association of persons or body of individuals unknown, etc.
C. AUTHORITIES
Candour rule. Section 167A is a bare charging clause with no section-specific case law. The relevant jurisprudence is that on firm status (sections 184/185) and partner remuneration/interest (section 40(b)).
Cluster A — Cross-reference (no direct authority)
Section 167A is machinery. For litigated questions on the taxation of firms, see the authorities under sections 184/185 (firm status) and section 40(b) (partner remuneration and interest); the cognate AOP charging provision is section 167B, below.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced from the Income-tax Act, 1961 (text as printed in the local Act, base text amended up to the Finance Act, 2025), with the publisher's footnote apparatus and amendment-marker brackets removed; three asterisks (***) denote words or a provision omitted by amendment and retained only to mark the omission. The Finance Act, 2026 amends no section of Chapter XV of the Income-tax Act, 1961 (its Part-A amendments touch ss.92CA, 139, 140B, 144B, 144C, 147A, 148, 150, 153, 153B, 220, 222, 234, 245, 245MA, 254 and 270A-276 only). Citations are stated as reported; orders of the Tribunal and High Courts are flagged as such. Where a section has not been judicially construed, that is stated candidly and the nearest governing authority is given. This material is for professional reference and is not legal advice.