Process to Change Tax Slab in AOP-BOI - ITR-5

ExpressITR || Process to Change Tax Slab in AOP/BOI - ITR-5


Process to Change Tax Slab in AOP/BOI ITR-5

This guide provides a step-by-step process to change the tax slab for an Association of Persons (AOP) or Body of Individuals (BOI) while filing ITR-5. The applicable tax slab depends on the type of AOP/BOI and the nature of income. Follow the steps below to ensure correct tax slab selection and calculation.

Understand the Tax Slab Categories for AOP/BOI


Alert
Category 1: Normal AOP/BOI
  1. Taxed at individual rates based on the income range.
  2. Applicable tax slabs:
      

Additional Charges:
  1. Surcharge:
    1. 10% of income tax if income > ₹50 lakhs but ≤ ₹1 crore.
    2. 15% of income tax if income > ₹1 crore but ≤ ₹2 crores.
    3. 25% of income tax if income > ₹2 crores but ≤ ₹5 crores.
    4. 37% of income tax if income > ₹5 crores.
  2. Health and Education Cess: 4% on income tax and surcharge.
Alert
Category 2: AOP/BOI with Determinate Shares
  1. Taxed at the Maximum Marginal Rate (MMR) of 30% if the income exceeds the basic exemption limit.
  2. Surcharge and cess apply as mentioned above.
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Category 3: AOP/BOI with No Member Exceeding the Basic Exemption Limit
  1. Taxed at individual rates as if each member were an individual.
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Category 4: AOP/BOI with Foreign Company Members
  1. Taxed at 40% (plus surcharge and cess).

Steps to Change Tax Slab in ITR-5

Step 1: Access the ITR Profile
  1. Open the client profile in your ExpressITR software.
  2. Navigate to the ITR Summary section.
  3. Click on Return Flow to proceed.
      

Step 2: Open the Business and Profession Head
  1. Locate the Business Profession Head section in the ITR form.
      

Step 3: Enter Member Details
  1. Go to the Business Information tab.
      
  1. Select Member Details and fill in the relevant fields based on the category:
    1. For Determinate Shares:
      1. Enter the percentage of shares held by each member.
      2. Set "Income exceeds max amount not charged to tax" to "No".
                        
                        
    1. For Indeterminate Shares:
      1. Leave the "Percentage of Share Held" field blank.
                        
                        
                        
Step 4: Verify Tax Computation
  1. Open the tax computation section.
  2. Ensure that the tax is calculated as per the applicable rates:
    1. Individual slab rates for normal AOP/BOI.
    2. 30% for determinate shares.
    3. 40% for foreign company members.

Important Considerations
  1. Losses → Losses of an AOP/BOI cannot be carried forward or set off against member's income.
  2. Alternate Minimum Tax (AMT) → AOP/BOI is subject to AMT at 18.5% of adjusted total income, if applicable.
  3. Cross-Check Filing Details →
    1. Ensure all details entered in the ITR form match the financial data and supporting documents.
    2. Validate the return before submission to avoid errors.

We hope this guide helps you accurately change the tax slab for AOP/BOI in ITR-5.

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