I run a society in Bangalore which is registered under the Societies Registration Act 1960. Basically, this association has two types of income. One type of income is from deposits for maintenance charges, receipts from letting out halls for parties and such to members and outsiders, receipt for monthly water and electricity expenses etc. This income appears in a current account.
On the other hand, there is a fixed deposit account which is used to deposit the Earnest money deposits and annual installments paid by the members. Please tell me the taxability in respect of
1.. Is the Interest earned by the current account and the corpus fund subject to tax? The interest of corpus fund is re-invested in the fixed deposit as of today, but it will be used for doing major expenditures in the near future.
2. Considering the fact that the interest from FD is subjected to Income tax, is the total interest earned during the year (entirely) is subject to tax or can we adjust the excess of expenditure over income (excluding this interest)?
3. Whether or not the basic exemption slab will be applicable.
4. In case of payments received from contractors, should my association deduct tax at source (TDS).
Jan. 08, 2018