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CS Executive · Tax Laws and Practice · Basic Concept of Income Tax

A member of an AOP with determinate shares has his share in the AOP's income computed under section 309 of the Income-tax Act, 2025. Under which head or heads is this share charged in the member's hands?

The member's share is apportioned among the heads of income in the same way the AOP's income was determined under each head. Section 309(3) requires this, so it is not charged wholly under business income, other sources, or capital gains.

  1. AEntirely under Income from other sources
  2. BApportioned under the various heads in the same manner as the AOP's income was determined under each headCorrect
  3. CEntirely under Profits and gains of business or profession
  4. DUnder Capital gains only

Explanation

Section 309(3) provides that the member's share is apportioned under the various heads of income in the same manner in which the AOP's income or loss was determined under each head. It is therefore not automatically a business income or other sources income.

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