CAF-2 · Chapter 12 · Question 9 of 15
An AOP has an annual turnover of Rs. 350 million. The AOP did not file audited financial statements with its income tax return. What is the tax consequence for the members receiving a share of profit from this AOP?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) B) The share of the members will not be exempt from tax and will be fully taxable in their hands.
Explanation
In case an association of persons has a turnover of Rs. 300 million or more, the share of a member will not be exempt from tax unless the association files financial statements duly audited by a firm of Chartered Accountants or Cost and Management Accountants.
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