Income Tax Ordinance, 2001

CHAPTER-V

PROVISIONS GOVERNING PERSONS PART III ASSOCIATIONS OF PERSONS

From: 2023-07-01 - To: 0000-00-00 92. Principles of taxation of associations of persons.- (1) 1[***] An association of persons shall be liable to tax separately from the members of the association and 2[where the association of persons has paid tax the] amount received by a member of the association in the capacity as member out of the income of the association shall be exempt from tax 3[:] 4[Provided that if at least one member of the association of persons is a company, the share of such company or companies shall be excluded for the purpose of computing the total income of the association of persons and the company or the companies shall be taxed separately, at the rate applicable to the companies, according to their share.] 5[Explanation.– For removal of doubt it is clarified that if the income of association of persons is exempt and no tax is payable under the Ordinance due to this exemption, the share received in the capacity as member out of the income of the association shall remain exempt.] 6[***] 7[***] 8[***] 9[***] _________________________________________ 1-The words, brackets, figure and comma “Subject to sub-section (2)” omitted vide the Finance Act, 2007 (IV of 2007 assented on 30th June, 2007) 2-Inserted vide the Finance Act, 2003 (I of 2003 assented on 16th June, 2003) 3-Substituted for full stop vide the Finance Act, 2014 4-Added vide the Finance Act, 2014 5-Explanation added by Finance Act, 2022, dated 30-06-2022 6-Sub-section (2) omitted vide the Finance Act, 2007 (IV of 2007 assented on 30th June, 2007). At the time of omission sub-section (2) was as under:-- i[(2) Sub-section (1) shall not apply to an association of persons that is a professional firm prohibited from incorporating by any law or the rules of the body regulating the profession”. i. Sub-section (2) substituted vide Finance Act, 2003 assented on 16th June, 2003). At the time of substitution a different sub-section (2) was as under:- “(2) Sub-section (1) shall not apply to --- (a) an association of persons that is a professional firm prohibited from incorporating by any law or the rules of the body regulating the profession or (b) an association of persons in which a company…