18 February 2008
Fact An Apartment having 24 flats. The Apartment is running by an owners association. Association has a by laws which is not registered anywhere. Purpose of society to maintain apartment, flat owners/ tenants are paying Rs. 500 monthly for maintenance. Further association is earning rent of Rs. 132000 per annum on which TDS is deducted against let out of common roof for mobile tower.
Query 1. Whether registration is necessary, if necessary to which authority/ department. 2. Whether we can obtain PAN with a by laws, not registered. 3. Whether PAN can be obtained without registration. 4. Since the association is only meant for maintenance purpose, not for earning purpose, filling of return is necessary. If necessary what will be the status of association. 5. Whether income of the association will be exempt. 6. Whether tenant (Mobile Tower Company) is bound to deduct TDS.
Please guide further to obtain refund of tax deducted in accounting year 2007-08.
18 February 2008
1-firstly you will apply for pan card 2-pan card will not be obtained without registration 3-for tds refund you will submit your return to the respective officer if income is below taxable 4-income of the association is exempted form income tax if they are collected amount from there members and expences are incured from that income. so rent received from the compay is taxable income
18 February 2008
ANY APARTMENT ASSOCIATION IN ANY STATE MAY BE REGISTERED UNDER - THE SOCIETIES REGISTRATION ACT 1860 -AT THE STATE'S REGISTRAR OF SOCIETY'S OFFICE( USUALLY THIS OFFICE ALSO TAKES CARE OF MARRIAGES, DEATHS AND BIRTH REGISTRATIONS ETC...). THE MINIMUM NUMBER OF MEMBERS IS SEVEN . THE BYE LAWS NEED TO BE REIGISTERED WITH FEES PRESCRIBED AND A LIST OF OFFICE BEARERS . ANNUAL GEN. MEETING OF THE MEMBERS AFTER APPROVING AUDITED ACCOUNTS EVERY YEAR SEND A COPY TO THE REGISTRAR. IN THE AGM, NEW OFFICE BEARERS MAY BE ELECTED AS PER BYE LAWS. IF THE INCOME OF THE SOCIETY IS ONLY USED FOR THE NON PROFIT OBJECTIVES OF THE SOCIETY MEMBERS AND USED ONLY MEMBERS' BENEFIT WITHOUT ANY PROFIT MOTIVE , THERE IS NO TAX ATTRACTED AS THE SOCIETY WORKS FOR NONPROFIT MOTIVE OF SERVICE TO MEMBERS. WHY BOTHER ABOUT PAN AND FILING RETURNS. IAM NOT AWARE OF ANY FLAT' S SOCIETY (REGISTERED/OR OTHERWISE) WHO FILE IT RETURNS, THE REASON BEING ABOVE STATED. I MYSELF FLOATED AN APARTMENT SOCIETY FOR MY FLATS WHERE I LIVE IN HYDERABAD WHERE WE HAVE 5 FLOORS AND 30 FLATS AND HAVE MOBILE TOWER INCOME AND SAME AMOUNT P.M OF MAINTENANCE AS YOURS. PAN AND IT NOT INSISTED FROM RES. HOUSING SOCIETIES FOR REASONS STATED ABOVE. IF YOU OPT FOR PAN AND IT NO ONE OBJECTS EITHER. IF THE MOBILE TOWER MAN IS DEDUCTING TDS AT THE MOMENT, I WISH TO KNOW UNDER WHICH SUB SECTION OF SECTION 194( CATEGORY OF SERVICE ) IT IS DONE.YOU CAN PREVAIL ON THEM NOT TO DO TDS IN VIEW OF THE NON PROFIT ELEMENT IN THE SERVICE OF THE SOCIETY TO ITS MEMBERS. R.V.RAO
24 February 2008
Compulsory registration depends upon the regulation of State Govt however if u want to get it registered in my opinion it will registered with registrar of societies.
I don't think u will get PAN without certificate of Society. On the basis of certificate u will get PAN.
Income will be exempt from tax but only from maintainence activities(principle of mutuality).All other incomes like Intt Income or rental income for that purpose will be taxable.
Status will be Association of Persons and Income Tax will be charged at rate of Societies.
TDS on rent is compulsory.No exemption as this is taxable in handss of Society.
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