A body of individuals is a group of people that come together for a common purpose. The term can refer to a literal body of individuals or it can be used in more formal terms, like a corporation. In either case, it is not a legal entity. AOPs may not have legal status. There is no governing body for these groups, so their activities are governed by their members’ wills.
Whether a BOI or an AOP is taxed depends on its member’s income. The AOP/BOI must include its member’s total income, minus any income that is taxable at a higher rate. The maximum marginal rate is 30% for both types of tax. The higher rate applies to the highest income member of a BOI. In addition, any income that is distributed among the members of a BOI is taxed at a lower rate than the member’s marginal rate.
In addition to individuals, a BOI can also be a foreign company. In some cases, a foreign company can be a member of the Association of Persons. If the association is incorporated under the Elective Corporate Structure (ECS), a member can claim deductions based on their share. AOPs can also pay self-assessment tax online. However, it is important to note that members of a BOI cannot claim tax deductions in relation to their individual share.
Tax treatment of AOPs is quite different than that for individuals. While the latter pays income tax at the individual rate, the AOP/BOI is allowed to claim a basic exemption of Rs. 2,50,000. It should not be subject to the Alternative Minimum Tax unless the total income of the body of individuals falls below 20 lakhs. However, it is important to note that the AOP will pay income tax on any additional income.
AOP can also involve other activities, such as remarketing. These activities will allow you to reach your target audience on social media, and identifying sales prospects. For example, if you are a ten-person team selling handmade earrings, you’ll simply sell whatever you have during a sales drop. But if you’re a larger business, you’ll want to implement planning activities throughout your entire supply chain. A well-designed S&OP plan will minimize inconsistencies in your supply chain, lower your buffer product, and improve customer satisfaction and delivery times.
