Association of Persons OR Body of Individual


Association of Person: The Income Tax Act does not define the meaning and definition of AOP. In the absence of any definition under the Income Tax Act, the words must be read in their plain ordinary meaning.

“AOP means two or more personas who join for a common purpose with a view to earn an income.” [CIT vs Indira Balkrishna (1960) 39 ITR 546(SC).

Body of Individual: Under BOI only individual may come and join hands together. BOI a combination of individuals who carry on some activity with an object to earn some income. If any income assessed in the hands of BOI that shall not be taxable in hands of individual again.

Difference Between AOP and BOI :

1. AOP may consist of non-individual but in case of BOI, only individual may Consist BOI.

2. In case of AOP there should be a combined will to engage in an income  producing activity. But in case of BOI there may or may not a combined will. In other words, person who do nothing by stand wait, may be a BOI but may not be an AOP.

Classification of AOP/BOI for better under standing and assessment purpose:

AOP or BOI can be classified in following manner:

1. Co-operative Society  : Section 2(19), 80 G to 80 P Deduction from Gross Total Income are play important role for assessment of Co-operative society 

2. Society Registered under the Societies Act, 1860 or registered under any other law force in any part of India.  Registered Society assessed at slab applicable to an Individual]

3. Mutual Association : MA are assessed under section 44A]

4. Trust : Trust may further classified and important section related to assessment Trust and classification are as under:

            (i)   Private Trust  [Section 161 and Section 164(1) are applicable]

            (ii) Charitable Trust [ Section 11, 12 & 13 and Section 164(2)  are applicable]

            (iii) Oral Trust [Assessment given under 164A]

5. Other AOP or BOI  [Section 67A, 167B(1) and 167B(2) are the important section for Assessment of residual AOP.

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