02 June 2013
Sir in which exam you are asking this question? Anyhow this income is taxable after allowing all expenses allowable as per the provisions of Income Tax Act and the balance profit is to be taxed under the head Income from Business or profession.
12 June 2013
thanks for answering..well i wanted to know how do these trade and professional associations provide specific services to their members ? can you give some examples..
10 August 2024
Trade and professional associations often provide a range of specific services to their members that are integral to their operations and professional development. These services can be categorized into various types, and here's a detailed look at how these associations provide such services:
### **1. **Educational Services**
- **Training Programs and Workshops**: Associations often organize training sessions, workshops, and seminars to enhance the skills and knowledge of their members. For example, a medical association might offer continuous medical education (CME) courses. - **Certification Programs**: Many associations provide certification or accreditation programs that are recognized within their industry, such as project management certifications by a professional project management institute.
### **2. **Networking and Professional Development**
- **Conferences and Networking Events**: Associations host conferences, conventions, and networking events where members can meet peers, exchange ideas, and collaborate on projects. For instance, an association of architects might host an annual convention to showcase new architectural designs and innovations. - **Mentoring and Advisory Services**: They may offer mentoring programs or advisory services to help members navigate their careers and professional challenges.
### **3. **Advocacy and Representation**
- **Lobbying and Representation**: Associations represent their members’ interests in discussions with government bodies, regulatory agencies, and other stakeholders. For example, a trade association in the technology sector might lobby for favorable legislation regarding data privacy. - **Policy Development**: They often engage in the development of industry standards and best practices, influencing policy and regulations that affect their members.
### **4. **Information and Research**
- **Industry Reports and Research**: Associations frequently conduct research and publish reports on industry trends, best practices, and statistical data. For instance, a financial services association might publish annual reports on market trends and financial regulations. - **Publications and Newsletters**: They provide regular publications, newsletters, and journals that keep members informed about industry developments and association activities.
### **5. **Member Services and Support**
- **Legal and Professional Advice**: Associations may offer access to legal or professional advice services. For example, a bar association might provide legal resources and consulting services for attorneys. - **Discounts and Benefits**: They often negotiate discounts on products and services for their members, such as discounted insurance plans, software, or office supplies.
### **Examples of Specific Services**
1. **Medical Associations**: - Offer specialized medical training and certification programs. - Provide access to medical journals and research databases. - Organize medical conferences and seminars.
2. **Legal Associations**: - Conduct legal workshops and continuing legal education (CLE) courses. - Publish legal research and case law updates. - Offer networking opportunities and career development resources.
3. **Engineering Associations**: - Provide certification and accreditation for engineers. - Host engineering conferences and technical workshops. - Offer resources for professional development and continuing education.
4. **Business and Trade Associations**: - Conduct market research and industry analysis. - Offer business training programs and leadership development. - Provide a platform for networking with potential clients and partners.
### **Basis of Charge under Income Tax Act**
Income derived by a trade, professional, or similar association from specific services performed for its members is often classified as income from business or profession. These associations charge their members for these specific services, and this income is taxable under the head “Profits and Gains of Business or Profession” (PGBP) in the Income Tax Act.
**Key Points:**
- **Revenue Recognition**: The income generated from these services is recognized as business revenue and is subject to taxation based on the applicable tax rates and provisions. - **Expenses**: The association can claim deductions for expenses incurred in providing these services, such as administrative costs, training expenses, and event organization costs. - **Tax Compliance**: Associations must comply with tax regulations regarding income reporting, deductions, and tax payments as per the laws governing non-profit and for-profit organizations.
Understanding how trade and professional associations operate and the specific services they provide can help in recognizing the nature of their income and its tax implications.
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