SYED ASJAD ALI 2096

ALIZA SAEED 2106

Suhaib Bin Aziz

AFNAN JAVED
Definition
Residential Status Of AOP
Principles Of Taxation Of AOP & It’s
Members
Rates Regarding AOP
Steps For Calculating Tax Of AOP
Practical Question
Calculation of taxable liability of AOP

Taxable liability is calculated in following three heads

• Introduction of person

• Computation of taxable income

• Computation of taxable liability

 INTRODUCTION OF PERSON
Name Of AOP ABC Associated
Title
Status Slide Only,Individual
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AOP
Company

Residential Status Resident / Non resident

NTN xxxx-xxx-xxx

Tax Year 2009

Address ----------------------------------------------
---------------------------------
 Procedure
The procedure of calculation of taxable income of AOP is as under
in 4 steps.

Taxable Income Tax Liability

Tax liability of Distributable

members Income
 Calculation Of Taxable Income
Profit (accounting Profit) x,xx,xxx

ADD Advisable Expenses

Salary to partners xxx

Commission to partners xxx
Interest on capital to partners xxx
Depreciation on finance lease xxx
Provision for bad debts xxx
Accounting loss on disposal xxx
Bills of partners (utility bills) xxx
House rent allowance to partners xxx
Profit on debts xxx
Entertainment expenditure xxx
Fine or penalty to violation of law xxx xx,xxx

X,XX,XXX
 X,XX,XXX
Less

Tax based Depreciation xxxx

Tax loss on disposal xxx

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Accounting gain on disposal xxx

Taxable Income
xxxxxx

xxxxxxxxx
Rates Applied to AOP
for Calculation of
taxable income
 SLAB # TAXABLE INCOME RATE
1 Up to Rs.100,000 Nil
2 100,001 – 110,000 0.50%
3 110,001 – 125,000 1.00%
4 125,001 – 150,000 2.00%
5 150,001 – 175,000 3.00%
6 175,001 – 200,000 4.00%
7 200,001 – 300,000 5.00%
8 300,001 – 400,000 7.50%
9 400,001 – 500,000 10.00%
10 500,001 – 600,000 12.50%
11 600,001 – 800,000 15.00%
12 800,001 – 1,000,000 17.50%
13 1,000,001 – 1,300,000 21.00%
14 Over Rs. 1,300,000 25.00%
A woman taxpayer shall not pay tax up to taxable income of Rs. 125,000
 Rules And Regulation

Share of loss from AOP is not adjustable against income of

Member Nor it is considered for rate purposes.

The max limit of rebate on donation under clause 61 is

30% of taxable income in case of individual or AOP.

Share of profit from AOP is exempt in hands of members

But same shall included in TI only for rate purpose.
 Principles of Taxation Of AOP

An AOP shall be liable to tax separately from the membe

the association and where the AOP has paid tax the amou
received by a member of the association in the capacity a
members out of the income of the association shall be exe
from tax
AB & Co. is registered firm having 2 partner A and B. Sharing profit and loss equally.
The net profit of the firm for the year was Rs.600,000 after accounting for the under
Illustration
noted disbursement to partners.

(a) salary (basic) per month

(b) Monthly HRA

A B
(C) hotel bills 10,000 10,000

5,000
Commissions of Rs.50,000 paid to non resident on which tax as 5,000at
not deducted
source
20,000but as25,000
Vehicle was sold for Rs 120,000 WDV as per book was Rs. 80,000 per was
record it was 60,000
 Solution
Accounting profit 600,000
ADD
Salary to member A 120,000
Salary to member B 120,000
HRA to member A 60,000
HRA to member B 60,000
Hotel Bills to A 20,000
Hotel Bills to B 25,000
Commission without Tax 50,000
Tax gain on sale 60,000 515000_____
1,115,000
LESS
Accounting gain on disposal ___40,000____
Taxable income 1,075,000
Less Income Tax 21% ___225,750__
Divisible Income 849,250
Taxable Income and taxable liability of members
If members of AOP earn income other then profit from
AOP then
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