Q. Sir, as per Section 66 read with Section 15, co-ownership is not AOP for purposes of Income from Property .... If that is so, then why tax rates for AOP are provided in respect of its Income from Property?
A. Section 66 of ITO-2001, provides that:
- if a property is jointly owned by two or more persons, and
- the respective shares of the co-owners are 'definite' or 'ascertainable'
then, the persons shall not be assessed as AOP in respect of the income produced by the property, and their respective share of in that income will be chargeable to tax in the hands of the co-owners individually. (But, this provision will not apply if the jointly-owned property produces 'Income from Business'.)
In the context of your question, Income from property will not be charged to tax in the hands of AOP if BOTH the aforementioned conditions are fulfilled i.e. property is jointly owned and respective shares of the co-owners are definite and ascertainable. In case a property producing Income from Property is jointly owned but the respective shares of the co-owners are neither 'definite' nor 'ascertainable', the income from property shall be charged to tax in the hands of the AOP. It is for this situation that tax rates for Income from Property of AOP are provided in the ITO-2001.
No comments:
Post a Comment