Section 310 — Share of member of association of persons or body of individuals in income of association or body. Successor to s.86 of the 1961 Act.
Section 310 is in Chapter XVII — Special Provisions Relating to Certain Persons, which runs from section 302 to section 355.
Sub-section (1) exempts a member of an association of persons or body of individuals from income-tax on his share in the association's income as computed under section 309, save in the case in sub-section (2). Sub-section (2) supplies that case: where no income-tax is chargeable on the total income of the association or body itself, the member's share is chargeable as part of his own total income. Sub-section (3) then decides what happens to a share that is not taxed in the member's hands — if the association or body is charged at the maximum marginal rate or higher under any provision of the Act, the share is left out of the member's total income altogether; in any other case it forms part of his total income even though no tax is payable on it.
It stops the same income being taxed twice, once in the association and again in the member, by taxing it at one level only. The split in sub-section (3) is deliberate: where the association has already borne the maximum marginal rate the share drops out entirely, but where it has been taxed at ordinary rates the share still enters the member's total income and so affects the rate on his other income.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Rate at which the association must be charged for the share to be excluded from the member's total income | The maximum marginal rate, or any higher rate | Charged on the total income of the association or body under any provision of the Act; only then is the share left out of the member's total income under clause (a) | 310(3)(a) |
Work out the association's position first, because the member's treatment follows from it. If the association pays tax at ordinary rates, your share is exempt from tax in your hands but still goes into your total income under sub-section (3)(b), so it can push your other income into a higher band. If the association is taxed at the maximum marginal rate or higher, the share is excluded completely. If the association pays no tax at all on its total income, sub-section (2) reverses the exemption and the share is taxable as part of your total income.
An association of persons has a total income of Rs. 50 lakh charged at ordinary rates, and a member's share computed under section 309 is Rs. 10 lakh. Sub-section (1) means he pays no tax on that Rs. 10 lakh, but sub-section (3)(b) still makes it part of his total income, so it lifts the rate borne by his other income; had the association been chargeable at the maximum marginal rate or higher, clause (a) would have kept the Rs. 10 lakh out of his total income entirely. And if no income-tax were chargeable on the association's total income at all, sub-section (2) would reverse the exemption and charge the Rs. 10 lakh as part of his total income.
In the member's return, where the share has to be carried in even when no tax is payable on it, and in his assessment where the rate on his other income is worked out. The section names no form or authority — what settles the treatment is how the association or body was itself charged.
Where no income-tax is chargeable on the total income of the association of persons or body of individuals, the share of a member computed as provided in section 309 shall be chargeable to tax as part of his total income.
See the full 1961 to 2025 concordance.
See the notifications index.