Charge of tax where shares of members in association of persons or body of individuals unknown, etc.
[As per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 311(1) of Income Tax Act 2025
(1) Where the individual shares of the members of an association of persons or body of individuals in the whole or any part of the income of such association or body are indeterminate or unknown,—
(a) tax shall be charged on the total income of the association or body at the maximum marginal rate; or
(b) where the total income of any member of such association or body is chargeable to tax at a rate which is higher than the maximum marginal rate, tax shall be charged on the total income of the association or body at such higher rate.
Section 311(2) of Income Tax Act 2025
(2) Where the individual shares of the members of an association of persons or body of individuals in the whole or any part of the income of such association or body are determinate or known,––
(a) the total income of any member thereof for the tax year (excluding his share from such association or body) exceeds the maximum amount which is not chargeable to tax in the case of that member under the Finance Act of the relevant year, tax shall be charged on the total income of the association or body at the maximum marginal rate;
(b) any member or members thereof is or are chargeable to tax at a rate or rates which is or are higher than the maximum marginal rate,—
(i) tax shall be charged on that portion or portions of the total income of the association or body which is or are relatable to the share or shares of such member or members at such higher rate or rates, as the case may be; and
(ii) the balance of the total income of the association or body shall be taxed at the maximum marginal rate.
Section 311(3) of Income Tax Act 2025
(3) For the purposes of this section, the individual shares of the members of an association of persons or body of individuals in the whole or any part of the income of such association or body shall be deemed to be indeterminate or unknown if such shares (in relation to the whole or any part of such income) are indeterminate or unknown on the date of formation of such association or body or at any time thereafter.