Section 310 Income Tax Act 2025: Is an AOP or BOI Member's Share Taxable?

Section 310 explains whether a member of an association of persons (AOP) or body of individuals (BOI) must pay income tax on the share of income computed under Section 309. The answer depends on whether tax is chargeable on the AOP or BOI and, if so, the rate at which it is chargeable.

Legal position: Section 310 forms part of Chapter XVII of the Income-tax Act, 2025, applicable from 1 April 2026. It broadly corresponds to Section 86 of the Income-tax Act, 1961. Read it together with Sections 309 and 311. This article discusses the statute and does not replace case-specific tax advice.

What does Section 310 provide?

The provision coordinates taxation of an AOP or BOI with taxation of its members. It seeks to prevent separate tax being levied again on a member's share where the statutory conditions apply, while preserving taxation in the member's hands where the AOP or BOI itself is not chargeable to income tax.

Section 310 explained subsection by subsection

Section 310(1): General rule

A member ordinarily does not pay income tax separately on the share of AOP or BOI income computed under Section 309. This general rule is subject to the exception in Section 310(2).

Section 310(2): AOP or BOI not chargeable to tax

If no income tax is chargeable on the total income of the AOP or BOI, the member's share computed under Section 309 becomes chargeable to tax as part of the member's total income. The fact that an entity has no tax payable is not necessarily the same as no tax being chargeable: the statutory wording and facts must be examined.

Section 310(3)(a): Maximum marginal or higher rate

Where Section 310(1) applies and the AOP or BOI is chargeable on its total income at the maximum marginal rate or any higher rate under the Act, the member's computed share is not included in the member's total income.

Section 310(3)(b): Other taxable cases

In other cases in which Section 310(1) applies, the member's share forms part of the member's total income, although income tax is not payable by that member in respect of the share itself under Section 310(1). This distinction may matter for rate calculations and other provisions that depend on total income.

How is an AOP or BOI member's share treated?

Situation	Member's treatment
No income tax chargeable on AOP/BOI total income	Share is chargeable as part of member's total income: Section 310(2)
AOP/BOI chargeable at maximum marginal rate or higher	Share excluded from member's total income: Section 310(3)(a)
Other cases where AOP/BOI is chargeable to tax	Share included in member's total income, but no separate tax payable on that share: Sections 310(1) and 310(3)(b)

Practical illustrations

Example 1: Maximum marginal rate

An AOP has income of Rs. 10,00,000, and member A's computed share under Section 309 is Rs. 4,00,000. If the AOP is chargeable at the maximum marginal rate, that Rs. 4,00,000 share is excluded from A's total income under Section 310(3)(a).

Example 2: No tax chargeable on AOP income

Assume the AOP's total income is not chargeable to income tax and member B's share computed under Section 309 is Rs. 2,00,000. Section 310(2) requires that share to be treated as chargeable to tax in B's total income, subject to the other applicable provisions.

Example 3: Other chargeable AOP

If the AOP is chargeable to tax but not at the maximum marginal or a higher rate, the member's share forms part of total income under Section 310(3)(b), without separate income tax payable on that share under Section 310(1).

These examples illustrate the statutory classification only. They do not compute actual tax, surcharge, cess, relief or return disclosures.

Relevant statutory definitions and provisions

Association of persons (AOP) and body of individuals (BOI): Recognised categories of persons for income-tax purposes. Section 309(1) excludes a company, co-operative society and registered society of the specified kind from AOP/BOI for Sections 309 to 311.

Member's share: The amount determined in accordance with Section 309, including the specified adjustments for interest, salary, bonus, commission or remuneration paid to members, where applicable.

Maximum marginal rate: The rate defined by the Income-tax Act for relevant provisions; it must be distinguished from the ordinary slab rate applicable to an individual.

Determinate or known shares: The members' respective entitlements are ascertainable. Section 309 addresses computation where shares are determinate and known; Section 311 addresses tax charging rules, including unknown or indeterminate shares.

Frequently asked questions

Is every AOP member's share exempt from income tax?

No. Section 310(2) taxes the share in the member's hands where no tax is chargeable on the AOP or BOI total income. In other cases, Section 310(3) distinguishes between exclusion from total income and inclusion without separate tax on the share.

What is the difference between Sections 309 and 310?

Section 309 prescribes how a member's share is computed. Section 310 determines how that computed share is treated for the member's income tax.

Does Section 310 apply where members' shares are unknown?

The computation mechanism in Section 309(2) specifically concerns determinate and known shares. Where shares are unknown or indeterminate, Section 311 must be considered.

Which provision applied under the 1961 Act?

Section 86 of the Income-tax Act, 1961, dealt with the corresponding treatment of a member's share in an AOP or BOI.

Statutory sources and further reading

Consult the official Income-tax Act, 2025 (as amended by Finance Act, 2026) and the Income Tax Department's Act portal for the authoritative statutory text.

Last updated: 11 November 2026.