In case of such AOP or BOI, if the share of the members are determinate, the share of the member (whether a net profit or net loss) in the total income or loss of AOP or BOI shall be computed as under:
-
any interest, salary, bonus, commission or remuneration by whatever name called, paid to any member in respect of the previous year shall be deducted from the total income of the association or body and the balance ascertained and apportioned among the members in the proportions in which they are entitled to share in the income of the association or body. It may be noted that such interest, salary, etc. has to be deducted from the total income without deducting any tax paid by AOP/BOI;
-
where the amount apportioned to a member under clause (a) is a profit, any interest, salary, bonus, commission or remuneration aforesaid paid to the member by the association or body in respect of the previous year shall be added to that amount, and the result shall be treated as the member's share in the income of the association or body. In other words, member’s share in the income of association/body/firm shall be share of profits, as computed as per clause (a), plusinterest,salary, etc. paid to him;
-
where the amount apportioned to a member under clause (a) is a loss, any interest, salary, bonus, commission or remuneration aforesaid paid to the member by the association or body in respect of the previous year shall be adjusted against that amount, and the result shall be treated as the member's share in the income of the association or body. In other words, the share of loss shall be adjusted against interest, salary, etc. and the balance shall be his share in the income of association or body.
The share of a member in the income or loss of the association or body, as computed above shall, for the purposes of assessment, be apportioned under the various heads of income in the same manner in which the income or loss of the association or body has been determined under each head of income. This is done for the purpose of set off of current year and brought forward losses of the members. [Section 67A(2)] |
