1) Our Society has accumulated funds by means of Sinking Fund and Repair Fund which are invested in FD with PSU Bank.
2) CHS has earned Interest on those FD and had not filed ITR and how they have done that.
3) CHS has charged to each member under title "Income Tax Charges".
4) I am of the opinion that Income Tax on the interest that is earned by CHS should be deducted from the Interest Income. Kindly educate.
5) If FD is made with Cooperative Bank/s then the Interest Income is not chargeable. Is this correct?
6) If CHS to charge Income Tax to each member then can we suggest to keep the funds in Current Account so no Interest earned and no need for paying Income Tax
7) Can a member of CHS decline to pay towards Sinking Fund and Repair Fund if these two are the factors for investments in FD?
04 October 2019
1 Income tax payable by the society on interest income earned from FDs including interest income from co-op bank. 2 Income Tax on the interest that is earned by CHS should be deducted from the Interest Income and not collected from members. 3 Keeping the funds in current account is not a right decision. The funds are meant for earning interest to meet the repair expenses out of interest earned after paying income tax. 4 No he can't decline funds has to be intact and kept in FD and only interest income has to be spent for repair expenses.
Thank you for your response. I have noted that contribution towards Repairs Funds cannot be decline. I will raise the matter with CHS as to on what basis or prevalent laws the member has to bear the income tax. If you have any more information related to this by means of any CHS laws then kindly guide. Thank you again Regards
CAclubindia
