Section 318
Section 318: assessment of an event-based AOP, BOI or artificial juridical person about to dissolve
Section 318 mirrors Section 317's accelerated-assessment approach, but for organisations rather than individuals: an association of persons, body of individuals, or artificial juridical person set up for a particular event or purpose that looks likely to be dissolved during, or right after, the tax year it was formed in.
When this section is triggered
Irrespective of section 4, where it appears to the Assessing Officer that an association of persons, body of individuals, or artificial juridical person - formed, established or incorporated for a particular event or purpose in a tax year - is likely to be dissolved in that same tax year, or immediately after it, the total income of that entity for the period from the first day of that tax year up to the date of its dissolution is chargeable to tax in that tax year.
The same procedural rules as for persons leaving India
Section 317(2) to (6) - covering how the tax on completed years/part-years is worked out, income estimation, the notice requiring a return, and the rule that this tax is in addition to tax under other provisions - apply, so far as may be, to proceedings against such an entity in the same way they apply to persons leaving India.
Frequently asked questions
What kind of organisation does Section 318 target?
An association of persons, body of individuals, or artificial juridical person that was formed, established or incorporated for a particular event or purpose - for example, a body set up to organise a one-off event - and which looks likely to dissolve during the same tax year it was formed in, or immediately after.
How is the tax under Section 318 actually worked out?
By applying the procedural machinery of section 317(2) to (6) - the same rules used for assessing individuals who are about to leave India - covering estimation of income, the notice requiring a return, and treating this as additional tax over and above anything chargeable under other provisions.
Related sections
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Get help with an event-based AOP tax assessmentLast updated 9 September 2026