Chapter XVII - Special Provisions Relating to Certain Persons
Section 310
Section 310: is a member's share taxed again in their own hands?
Section 310 stops the same income being taxed twice - once in the hands of the association of persons (AOP) or body of individuals (BOI), and again in the hands of the member. As a rule, a member's share (computed under Section 309) escapes further income tax, except where the AOP/BOI itself paid no tax on that income.
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Need advice on Section 310?
This article is for general information. Refer to the Income-tax Act, 2025 as amended by the Finance Act, 2026 and the Taxation and Other Laws (Amendment) Act, 2026 for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) Income-tax shall not be payable by an assessee (who is a member of an association of persons or body of individuals) in respect of his share in the income of the association of persons or body of individuals computed in the manner provided in section 309, except in a case referred to in sub-section (2).
(2) 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.
(3) Where no income-tax is payable by an assessee under sub-section (1),––
(a) if the association of persons or body of individuals is chargeable to tax on its total income at the maximum marginal rate or any higher rate under any of the provisions of this Act, the share of a member computed as aforesaid shall not be included in his total income;
(b) in any other case, the share of a member computed as aforesaid shall form part of his total income.
Introduction
Section 310 determines whether the member’s section 309 share is taxed again in their own hands. The result depends on whether the association or body itself is chargeable to tax and at what rate.
Key takeaways
Ordinary share not taxed twice
A member generally does not pay income tax again on the share computed under section 309 when the AOP or BOI is itself taxed.
Untaxed AOP or BOI exception
If no income tax is chargeable on the body’s total income, the member’s share enters that member’s total income.
General rule: no further tax on the member
Income-tax is not payable by an assessee who is a member of an AOP/BOI in respect of his share in the AOP/BOI's income, computed under Section 309 - except in the situation described below.
Exception: where the AOP/BOI itself paid no tax
Where no income-tax is chargeable on the total income of the AOP/BOI itself, a member's computed share is chargeable to tax as part of that member's total income.
Where no tax is payable by the member under the general rule
If, under the general rule, no income-tax is payable by the member: and the AOP/BOI is chargeable to tax on its total income at the maximum marginal rate or a higher rate under any provision of the Act, the member's computed share is not included in his total income; in any other case, the member's computed share does form part of his total income.
Step-by-step flow for taxing a member's share under Section 310
- 1
Compute the member's share under Section 309
Use the method in Section 309, including the add-back of payments to the member.
- 2
Is any income-tax chargeable on the total income of the association or body?
- No: The member's share is chargeable to tax as part of his total income (Section 310(2)).
- Yes: Go to the next step.
- 3
No income-tax is payable by the member on the share
Under Section 310(1), the member does not pay income-tax on his share, except in the Section 310(2) case.
- 4
Is the association or body taxed on its total income at the maximum marginal rate or a higher rate?
- Yes: The share is not included in the member's total income (Section 310(3)(a)).
- No: The share forms part of the member's total income (Section 310(3)(b)), though no income-tax is payable on it under Section 310(1).
Practical checklist
Do
- Compute the member’s share under section 309 first.
- Check the AOP/BOI tax position before including or excluding that share from the member’s total income.
Avoid
- Assume every AOP distribution is automatically taxable again to the member.
Illustrative example
Worked example: member X's share from the Section 309 example
Hypothetical facts (illustration only, not a real taxpayer): Member X's share in an association of persons, computed under Section 309, is ₹9,60,000 (assumed). X also has other income of his own. Consider three alternative positions for the association.
Position 1: association pays tax at the rate for an association of persons
Tax is chargeable on its total income, so under Section 310(1) X pays no income-tax on the ₹9,60,000. Because the rate is not the maximum marginal rate, the share forms part of X's total income under Section 310(3)(b).
Position 2: association is taxed at the maximum marginal rate
X pays no income-tax on the share, and under Section 310(3)(a) the ₹9,60,000 is not included in his total income.
Position 3: no income-tax is chargeable on the association's total income
Under Section 310(2), the ₹9,60,000 is chargeable to tax as part of X's total income.
What the section does not say
Section 310 does not state how a share that forms part of total income but carries no tax affects the tax on X's other income; that follows from the rest of the Act.
Outcome
- X pays tax on the share only in Position 3.
- In Position 1 the share is still part of his total income; in Position 2 it is left out entirely.
Frequently asked questions
If an AOP already paid tax on its income, does a member pay tax again on their share?
Generally no - Section 310(1) exempts a member's share (as computed under Section 309) from further tax, except in the specific case in Section 310(2) where the AOP/BOI itself was not chargeable to tax on its total income.
Does a member's tax-free share still need to be reported anywhere?
Section 310(3) distinguishes: if the AOP/BOI was taxed at the maximum marginal rate or higher, the member's share is excluded from his total income; otherwise, it is included in the member's total income even though the AOP/BOI already bore tax on it.
Need help applying this provision to your situation?
Get help with AOP/BOI member taxationLast updated 9 October 2026