Share of Income from AOP / BOI

Section 86 — Share of Income from AOP / BOI

Where the assessee is a member of an association of persons or body of individuals (other than a company or a co-operative society or a society registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any part of India), income-tax shall not be payable by the assessee in respect of his share in the income of the association or body computed in the manner provided in section 67A:

Provided that,—

(a) where the association or body is chargeable to tax on its total income at the maximum marginal rate or any higher rate under any of the provisions of this Act, the share of a member computed as aforesaid shall not be included in his total income;

(b) in any other case, the share of a member computed as aforesaid shall form part of his total income.

PLANNING NOTES

Section 86 prevents double-charge: AOP/BOI is taxed at MMR; member's share excluded from member's TI. Where AOP is taxed at slab rates (e.g., share of members determinate), the share is INCLUDED in member's TI but rebate u/s 86 ensures no double-tax.