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AOP/BOI

AOP, BOI & HUF

An Association of Persons (AOP) and a Body of Individuals (BOI) convey two different associations of people. We can not interchange both terms because both terms are different and interchangeably don’t justify the restrictive interpretation. Both represent different compositions.

Defines AOP (Association of Persons) as the integration of persons for a mutual benefit or a common purpose.

BOI (Body of individuals) is similar to an AOP and is also an accumulation of individuals who have come together with the objective of earning some income.

However, there are certain differences between an Association of Persons and a Body of Individuals.

A person in AOP could be a company or an individual person. The term person could include any association, body of individuals, or company, irrespective of whether it is incorporated or not. However, in a BOI, only individuals can join with the intention of earning some income. Hence we can say, BOI only comprises individuals, whereas an AOP could include legal entities.

In short, we can say AOP (association of persons) has a legal meaning and it represents a unit having duties and rights.

 

HUF Introduction

1. What is a HUF

HUF means Hindu Undivided Family. This is being created for the purpose of saving tax of family by pooling of assets into HUF. HUF is taxed separately from its members. A Hindu family can come together and form a HUF. Buddhists, Jains, and Sikhs can also form a HUF. HUF has its own PAN and files tax returns independent of its members.

 

2. How to form a HUF?

There are some income tax advantages of creating HUF, you must also meet some conditions –

  • One person cannot form HUF, it can only be formed by a family.
  • A HUF is automatically created at the time of marriage.
  • HUF consists of a common ancestor and all of his lineal descendants, including their wives and unmarried daughters.
  • Hindus, Buddhists, Jains, and Sikhs can form HUFs.
  • HUF usually has assets which come as a gift, a will, or ancestral property, or property acquired from the sale of joint family property or property contributed to the common pool by members of HUF.
  • Once a HUF is formed it must be formally registered in its name. A HUF should have a legal deed. The deed shall contain details of HUF members and the business of the HUF. A PAN number and a bank account should be opened in the name of the HUF.

3. The disadvantage of forming a HUF

All Members has an equal right

Partition

Joint family system losing relevance

HUF continues to be file ITR till partition.

Advantages of Trust Registration

  1. An NGO registered under the Trusts Act can use the word “Govt. Regd.” or ‘Regd’.
  2. Trust can take Land from the government.
  3. There are several tax benefits such as Income Tax, etc.
  4. The donor can take benefit u/s 80G,  after donating the amount to the trust.
  5. White capital for Building construction.

Following objective cause:-

  1. As per S.2(15) of the Income Tax Act, 1961, unless the context otherwise requires, the term “charitable purpose” includes
    1. relief of the poor,
    2. education,
    3. yoga,
    4. medical relief,
    5. preservation of the environment (including watersheds, forests, and wildlife) and preservation of monuments or places or objects of artistic or historic interest, and
    6. the advancement of any other object of general public utility

As AOP, BOI & HUF is not required any registration under any act but they have to prepare an agreement on the basis they can obtain PAN and filing Annual income tax return.

Taxation of AOP & BOI

The individual share of members in the case of BOI or AOP could be either unknown/intermediate or known/determinate. In these cases, the tax payable by the AOP/BOI will be calculated as under.

When:

Share of Profits of members is unknown/ intermediateShare of Profits of members is known/determinate
When the share of Income of individual members of BOI or AOP wholly or partly is unknown, the tax would be charged on the total Income of the BOI/ AOP at the maximum marginal rate. In case the income of a member of the AOP is chargeable at the rate that is higher than the marginal rate, the former would apply i.e. the higher rate would be levied on total income of the AOP.Where the total income of the member of BOI/ AOP is more than the maximum exemption limit, the member with the highest income would be charged at a maximum marginal rate of 30 percent.

Taxation of HUF

All about Trust.

AOP, BOI & HUF

An Association of Persons (AOP) and a Body of Individuals (BOI) convey two different associations of people. We can not interchange both terms because both terms are different and interchangeably don’t justify the restrictive interpretation. Both represent different compositions.

Defines AOP (Association of Persons) as the integration of persons for a mutual benefit or a common purpose.

BOI (Body of individuals) is similar to an AOP and is also an accumulation of individuals who have come together with the objective of earning some income.

However, there are certain differences between an Association of Persons and a Body of Individuals.

A person in AOP could be a company or an individual person. The term person could include any association, body of individuals, or company, irrespective of whether it is incorporated or not. However, in a BOI, only individuals can join with the intention of earning some income. Hence we can say, BOI only comprises individuals, whereas an AOP could include legal entities.

In short, we can say AOP (association of persons) has a legal meaning and it represents a unit having duties and rights.

 

HUF Introduction

1. What is a HUF

HUF means Hindu Undivided Family. This is being created for the purpose of saving tax of family by pooling of assets into HUF. HUF is taxed separately from its members. A Hindu family can come together and form a HUF. Buddhists, Jains, and Sikhs can also form a HUF. HUF has its own PAN and files tax returns independent of its members.

 

2. How to form a HUF?

There are some income tax advantages of creating HUF, you must also meet some conditions –

  • One person cannot form HUF, it can only be formed by a family.
  • A HUF is automatically created at the time of marriage.
  • HUF consists of a common ancestor and all of his lineal descendants, including their wives and unmarried daughters.
  • Hindus, Buddhists, Jains, and Sikhs can form HUFs.
  • HUF usually has assets which come as a gift, a will, or ancestral property, or property acquired from the sale of joint family property or property contributed to the common pool by members of HUF.
  • Once a HUF is formed it must be formally registered in its name. A HUF should have a legal deed. The deed shall contain details of HUF members and the business of the HUF. A PAN number and a bank account should be opened in the name of the HUF.

3. The disadvantage of forming a HUF

All Members has an equal right

Partition

Joint family system losing relevance

HUF continues to be file ITR till partition.

Basic

INR 2,999/-*

One Time Fee

  • HUF, AOP, BOI Registration
  • PAN, & TAN
  • Bank A/c.

Service Provide Within 7 Days

*Price mention of each registration.

Standard

INR 2,999/-*

One Time Fee

  • HUF, AOP, BOI Registration
  • PAN, & TAN
  • Bank A/c.

Service Provide Within 7 Days

Premium

INR 9,999/-*

Yearly Fee

  • Yearly Income Tax Compliances HUF, AOP, BOI.
  • TDS Compliances
  • Income Tax Return
  • Balance sheet, I&E, R&P, P&L.

Services Provided Before the Due Date

* Price mention of each registration.

Frequently Asked Questions

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