67A. Method of computing
a member’s share in income of association of persons
or body of individuals.- (1) In computing the total
income of an assessee who is a member of an association of
persons or a body of individuals wherein the shares of the
members are determinate and known other than a company or
a cooperative society or a society registered under the Societies
Registration Act, 1860 (21 of 1860), or under any law corresponding
to that Act in force in any part of India, whether the net
result of the computation of the total income of such association
or body is a profit or a loss, his share (whether a net profit
or net loss) shall be computed as follows, namely :—
(a) any interest, salary, bonus, commission or remuneration
by whatever name called, paid to any member in respect of
the previous year shall be deducted from the total income
of the association or body and the balance ascertained and
apportioned among the members in the proportions in which
they are entitled to share in the income of the association
or body ;
(b) where the amount apportioned to a member under clause
(a) is a profit, any interest, salary, bonus, commission or
remuneration aforesaid paid to the member by the association
or body in respect of the previous year shall be added to
that amount, and the result shall be treated as the member’s
share in the income of the association or body ;
(c) where the amount apportioned to a member under clause
(a) is a loss, any interest, salary, bonus, commission or
remuneration aforesaid paid to the member by the association
or body in respect of the previous year shall be adjusted
against that amount, and the result shall be treated as the
member’s share in the income of the association or body.
(2) The share of a member in the income or loss of the association
or body, as computed under sub-section (1), shall, for the
purposes of assessment, be apportioned under the various heads
of income in the same manner in which the income or loss of
the association or body has been determined under each head
of income.
(3) Any interest paid by a member on capital borrowed by
him for the purposes of investment in the association or body
shall, in computing his share chargeable under the head “Profits
and gains of business or profession” in respect of his
share in the income of the association or body, be deducted
from his share.
Explanation.—In this section, “paid” has
the same meaning as is assigned to it in clause (2) of section
43.
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