Income tax of co op society

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 February 2013 A housing co op society earns interest income from Scheduled bank which are offered for income tax

Also the society has created sinking fund for repairs of water tank

The said fund is temporarily invested in scheduled bank on which interest of Rs 5 Lakhs is received which is transferred to Sinking Fund account

Expenses incurred on water tank comes to rs 7 LAkhs

Now what will be the tax liability of the society

a) on Interest income of Rs 5 LAkhs

B) or on the income net of expenss i.e. -2 LAkhs i.e. NIL

CA. RAGHAV GARG

CA. RAGHAV GARG (Expert)
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10 February 2013 as far as I can understand,

Interest on Fund received is taxble and will be included in the income of society

however, expenses of rs. 7 lakh for the same year will be allowed as deduction and the loss return is required to be filed.